3 Year BRRRR Testimony

[Brian Tome]

We bought this little 2 bedroom 1 bath cottage in Elkton, Maryland for $45K in 2018. It was in need of a complete rehab and we put another $80K into it before renting it to a nice young lady in January 2019. After renovation value was appraised at $147K on January 4, 2019. Our tenant takes excellent care of the property and it has cash flowed around $100/month (on a 15 year note with a 10% reserve) since then.

On the refinance we were not able to get all our money back out. We left about $15K in the deal, which we considered a failure at the time (I was hung up on the idea of getting everything back out). However, cash flowing $100/mo. it still produced an 8% return on investment, so we kept it and tried to do better on the next one.

Fast forward three years and this little cottage just appraised for $210K. After we refinance and put it on a 30 year note, it will cash flow about $300/month (without raising the rent once), put $57K cash in our pocket (to reinvest), and we will still have $53K in equity in a property that we originally invested $15K into - not to mention the tax benefits we gain from depreciation.

This is why I love real estate. It isn't easy or risk free, but it has been a blessing to us.

If you are in the Maryland, Delaware, Pennsylvania area, reach out so we can talk.  These deals are plentiful around the I-95 corridor through the tristate area.

[Jay Hinrichs]

Originally posted by @Brian Tome:

We bought this little 2 bedroom 1 bath cottage in Elkton, Maryland for $45K in 2018. It was in need of a complete rehab and we put another $80K into it before renting it to a nice young lady in January 2019. After renovation value was appraised at $147K on January 4, 2019. Our tenant takes excellent care of the property and it has cash flowed around $100/month (on a 15 year note with a 10% reserve) since then.

On the refinance we were not able to get all our money back out. We left about $15K in the deal, which we considered a failure at the time (I was hung up on the idea of getting everything back out). However, cash flowing $100/mo. it still produced an 8% return on investment, so we kept it and tried to do better on the next one.

Fast forward three years and this little cottage just appraised for $210K. After we refinance and put it on a 30 year note, it will cash flow about $300/month (without raising the rent once), put $57K cash in our pocket (to reinvest), and we will still have $53K in equity in a property that we originally invested $15K into - not to mention the tax benefits we gain from depreciation.

This is why I love real estate. It isn't easy or risk free, but it has been a blessing to us.

If you are in the Maryland, Delaware, Pennsylvania area, reach out so we can talk.  These deals are plentiful around the I-95 corridor through the tristate area.

Better get it done before April 1 rates are going to go up on govment backed investor loans.. even so probably just fine but your cash flow may be different than what your thinking today.. although small balance loan like this wont be affected as much as the larger balance loans and if you go max LTV your for sure going to have some serious points to pay.