NOT EXACTLY THE BRR STRATEGY BUT WHAT WE DID WORKED

[Henry R.]

Hello BP nation,

It has taking us sometime but in the fall of 2016 we purchased our first rental property. It is a 3 unit that was a foreclosure. We talked to several banks and found one very large bank that would rap the rehab with the mortgage the problem with this bank is they were very difficult to work with especially for the contractors. When I told someone I knew all the trouble I was having he offered to loan us he money a 10%. So we dropped the bank like a hot potato( come to find out they had their own serious problems). We bought the property with cash not using any of our own money for the purchase and used 16k of our money plus what was left from the 100K we borrowed to complete the rehab.They bank was asking 105K but we got it for 69K. It's not a home run ( we self manage) but it is doing well and mostly runs on autopilot. I did my home work and knew the property would be appraise at 140K it ended up appraising at 160K. We took the loan at 112K 80% of the 140K. Paid off the private money loan, the closing cost and walked a way with about $500.000

We could have done it on the 160K, however I did not want to over leverage the property on the first try. So we stuck with the plan.

Looking back I wished I got it even cheaper, but I can't go back and at this time we are in a joint business deal working on our first flip with seasons flippers.

We found the flip house and have been getting calls for other properties we are currently looking tying to get in the view a 5 unit, the owner however doesn't want his tenants to know he's looking to sell. 

Overall we are doing ok, but still slow going but we continue to press on.

Thanks for reading

Henry 

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