First BRRRR complete, excited to do more!

[Naema N.]

I don't visit BP as often as I should but I've gain a lot from going through these forums! We've officially completed our first BRRRR and I owe a lot to what I've learned from visiting these forums. I learned many lessons through this first one, so figured I shared for others to see it's worth working through the process and sticking with it. Here are the details about this deal...

Got property through Auction.com, entered into contract Nov 2019, for some reason the REO lender had not recorded the foreclosure deed prior to putting the property up for sale (lesson # 1, check recorder site before bidding on auction property, this could cause a delay). We were supposed to close Dec 2019, we are newbie investors but we were able to find a HML willing to do this deal without interior access to the property. We had pre-approvals and were ready to for a December or January close. After several months of being promised the deed was going to be registered only to find out it hadn't been, March rolls around and COVID happened, and the lender backed out. Now we had to go on a mad scramble to find another lending willing to do this for newbies without interior access. Luckily we found one through a podcast I was on, but by April we still hadn't closed so we were ready to give up. The issue was we had funds we knew we needed for closing that we couldn't use to get other properties b/c we didn't know when this closing would happen. We considered backing of the deal a few times but I knew this was a good deal so we stuck with it. Eventually July 1st 2020 we were able to close, we started rehabbing right away, the property didn't need a lot, we were able to get it done by mid September, it could have been faster had we been working with an experienced GC (lesson # 2, don't always go with the cheapest option, they're cheap for a reason). But we were able to get it done with some pushing and threats. Got the property listed for rent, it was pretty high rent for the area but the property was worth it, of course received tons of applications with many issues one way or another. Then we received an offer from an insurance company to place a tenant on a short term basis with a premium on the rent. And with COVID going on we would as at least be guaranteed premium rent for 6 months. All in all it was a worthwhile experience and journey. We officially closed on the refinance yesterday.

Deal Specifics:

Purchase price - $142,350 (initially won auction at $150K, but asked seller to reduce price due to delay and they agreed).

Rehab - Approximately $30K

All in (including purchase, interest on purchase and rehab costs, closing costs on purchase and refi, down payment, misc holding costs) approximately $190K 

ARV - $275K (per appraisal)

Refi loan $206,250

That's it's. What a ride...looking forward to more!