BRRRR Deal Number One!

[Wesley B Williams]

In the last year I started actively investing in real estate and have completed 3 deals, all of which were off market. Two of them are completed BRRRR's and the 3rd one should be soon once i am able to refinance! Through this process I have learned a lot. In particular I will be talking about the first deal here and how i got started. When 2020 started I was a long time listener of the BP podcast and looking back living vicariously through all of the guests stories, feeling like i was accomplishing something. When I say long time I'm talking roughly 7 years…I really got caught in that analysis paralysis cycle. Luckily for me I married an absolutely amazing woman and killer sales rep who knew how to get things done and how to push others to take action. She had known I was interested in real estate for the entire time that we started dating and finally got sick of hearing me talk about without backing up any of the talk so told me to just go and do something. Within 2 weeks i had my first deal under contract from a wholesaler i found on craigslist. I had every emotion you can think of pulsing through me when I signed that first contract my fear was only matched by my excitement. I paid $35,000 (down from 40) for a 3 bed/1 bath sq ft home in south Louisville. The purchase was all cash with the rehab being financed, and this home needed a bit of work. I made every mistake in the book buying it outside of getting 5k off the purchase price. I did the walkthrough myself without a contractor or anyone who knew what they were doing. As soon as a few of my good friends and fellow firefighters walked through it (after purchase of course) they pointed out every major flaw my naive self simply didn't see. For example a handful of the floor joist were hanging freely in the air with no support under them causing a dip in the bedroom above, there were several rafters and rafter ties that were broken causing the dip in the roof, some foundation issues letting water run in to the cellar and many more. The list of problems handed to me after the purchase was already made, paralyzed. And then I pushed that away started making phone calls and getting prices for work, which is where the next mistakes came. I hired unknown, unreferred contractors to do some of the major work of jacking the house up and repairing the roof because they gave me the "best" or cheapest deal. This ended up making the. Project last about three months longer than anticipated because they were slow and hard to make show up and they kept adding on expenses and not really being the cheapest in the end . So i probably paid more for worse work but it was finally done. In the end i had to put 40ish thousand into repairing this house and could have taken out a loan to cover the full purchase and rehab price but decided to leave about 30k in it for cash flow's sake. It rented out in under a week for 850 a month and luckily i followed some good advice on tenant screening so i've had a rockstar tenant who loves the place and pays on time every month with very few complaints. While by the numbers this isn't my best deal it will be special to me always and i'm happy i did it because now i have the confidence to be able to accomplish anything. For any one who is wanting to start investing but is scared I encourage you to take the jump, try to minimize mistakes, but know you can handle any unexpected things that come your way, if i can make money on a bad deal, anyone can do it as long as they have the grit.