Successfully BRRRRing a House at 21 Years Old & in College

[Kyle Wesley]

My Story

During a summer job in high school, I started to get tired of my paycheck being dependent upon only my time spent at the workplace. I enjoyed the job, but I enjoyed other things more. This planted a seed in my mind of the concept of an income that isn’t directly attached to me being physically present somewhere. I really didn’t know anything about passive income at the time, I just started to desire a way to make money at the same time I was doing other things.

Fast forward a year or two, I’m a sophomore in college. I met a friend who led a Christian, campus ministry that I’m involved in. He’s about 10 years older than me and he told me about his goal to reach a certain amount of monthly passive income. It was interesting to hear someone I personally knew talk about the power of real estate investing and I quickly became interested in this new industry I’d been told about. My friend, Matt, suggested I read Rich Dad Poor Dad, and that it would surely help me grasp the mindset of not directly working for your money. The book was eye opening; I was astonished at the possibilities that could come from this mindset.

As I continued working on a marketing degree, I’d been brainstorming potential career paths. By this time I’m a senior and I knew this decision would affect me in the near future. I’d been captivated by the idea of real estate investing through constant YouTube videos and BiggerPockets content. However, without any experience, real estate still kind of felt like a phantom industry.

The Purchase

In the spring of 2020, my friend Matt Crawford proposed the idea of going in 50/50 on an old, Victorian style house. We talked on the phone, he told me the details, and within about 5 minutes I committed to it. I had no idea of the experience that awaited us.

The purchase process was surreal, it felt odd buying a home at 21 years old. There were many things I didn’t fully understand, but I trusted my partner. I learned the things that make a partnership great – trust, understanding each other’s strengths and weaknesses, and commitment to a goal. In this situation, my partner had access to the money, and I had access to the time.

90% of the purchase price came from a private lender, rehab costs were provided by a HELOC on my partner's primary residence, and we paid the down payment and closing costs ourselves.

The Rehab

Taking on the rehab was the most challenging part of the process. I quickly jumped on the opportunity to get a rental under my belt, however, I’d never rehabbed a house and didn’t know everything it entailed. I understood that sweat equity would be my primary role, and I was completely okay with that. After all, this was an awesome way for me to get first-hand experience in an industry I love, and learn from a more experienced investor at the same time.

Below are a few pictures before/during the rehab. The first picture shows the entry way/living room and the second shows the upstairs bathroom.

The largest parts of the rehab included removing bat guano from the attic, tearing out lath and plaster walls, removing all plumbing, cleaning/scraping and painting the exterior of the home. We hired contractors for major tasks like drywall work, new plumbing, and electrical.

Spending late nights and lots of hours at the house was draining and sometimes stressful. However, I continued to remind myself of the vision we had for this property. I put my faith in what the property was going to be, not what it currently was, and that kept me moving.

Below are a few pictures of the first floor of the home after the rehab was completed, truly one of the greatest feelings.

The following pictures show the upstairs bathroom along with a bedroom.

Tenants

Throughout the rehab process, I knew of some fellow students who were looking for somewhere to live the upcoming school year. I told them about the house we were working on and explained what the finished product would be like. I relayed that it was close to campus with brand new renovations, making it the nicest college house in town. In less than two weeks we had the house fully rented with tenants ready to move in August 1st.

Refinance

After the rehab was complete, we headed to a bank to refinance our renovated property. Our numbers on the property were as follows:

• Purchase price: $41,000
• Rehab costs: $40,000
• Appraised for: $118,000
• Pulled out 75% LTV: $88,500
• Current monthly cashflow: $300

We were able to pay back our lender, rehab costs, and even pay ourselves back for the down payment.

Watching this BRRRR process come full circle has been incredible. I've learned that the first deal of your life isn't your money maker. It's your confidence booster, connection maker, and a load of experience. In turn, these three components can make you millions in the future. I've learned that persistence and delayed gratification are worth every ounce of sweat. A combination of doing these things well can ultimately provide a goal many of us are chasing, financial freedom. To me, this is bigger than making money or owning as much real estate as possible. It's about the ability to do what you love with the people you love and allow you to give back to others, honoring God throughout the entire process.

Future Plans

As I head into my last semester of college, I am extremely thankful for a clear career calling. My immediate plan is to obtain my real estate license and become an agent while continuously keeping my vision in the future. I believe being an agent will fit my personality well and will allow me to excel in my long-term goal of buying real estate with a close-knit team. I love working with others, bouncing ideas off one another, having different strengths and weaknesses, learning from others, and someday sharing what I’ve learned with other people as well. I am extremely thankful for my partner, Matt Crawford, for his willingness to take risk and take a chance with a brand-new investor on this deal. It has allowed me to get involved in the world of real estate investing and take big steps toward my goals.