First Investment Property (w/BRRRR)

[Aaron Gillette]

After reading Rich Dad Poor Dad, I decided that I'm all in on this. So I began to looking into bigger pockets and listening to about 20 hours of podcasts. So first thing I noticed in my small market is that we have only a few homes for sale and next to no rentals open. So lets go look for the first few homes that need some REHAB that will make a decent rental. 

The first home I go to see is a complete nightmare. Someone started to work on the home and decided to quit and the reason is unknown. ceilings had mold and it was really a 2 bedroom home and not 3. The garage has almost no foundation left and probably would just need to be taken down and replaced.

I find a much better home at another great price but I don't have the upfront capital for the purchase price before rehab.......  

So I began to look into getting a HELOC on my home I live in now that I bought as a foreclosure just over a year ago for 45K. So I call the bank and along with great credit they go and tell me that the rough estimate that I can pull as equity is 100K. I was completely shocked. That's a 200% return as it only took 5K to get the house up to par. This doesn't include if I finish my unfinished basement with another bedroom, bathroom and office space.

Originally thinking I was going to start with a 20K house that would need a lot of work, to maybe a 45-65K house with less rehab to pull the 80% LTV.

I will continue to update this as the time goes on.