My First BRRRR Deal Success!

[Brett Schickler]

Hello, I Just completed my first BRRRR deal and it went great! So I thought I might share my experience in hopes that it might help some other new investors find the courage to take the next step, because this stuff works! I found a SFR on mls, the property was a short sale and it was listed at $69,000 I knew the area and I believed it was in a great area. I ended up getting the property under contract for $66,000, I worked with a local private lender who was willing to give me a 12 month interest only loan for $80,000 (66,000 purchase price + 14,000 in repair funds). I closed on the property and got to work, I thought that if I did the work myself it would save money and hopefully I could come in under budget (I was wrong) so I spent the better part of 2 months messing around trying my best to fix the property up (Full disclosure, there aren't enough DYI videos on youtube to make me even a decent contractor) So after the first 2 months of working full time, spending every night, weekend and holiday working on the property with little to show for it, I decided it was time to change course. I had already bid out all off the work to different contractors prior to closing and was able to quickly plug them into place. I wanted to share this part specifically because I don't believe you have to know how to build a house from the ground up to be in this business, because I surely am not that talented. I did discover however, that I really enjoyed managing the project, negotiating with vendors and contractors, so moving forward I decided that was going to be my role. After that the rehab went smooth, there were a few minor hiccups along the way but much less so than when I was trying to handle it all myself. We completed the rehab and I put the property up for rent on craiglist and the calls started rolling in. I got the property rented for $1500 per month. After month 6 I went to a local bank and applied for the ReFi, the appraisal came in at $135,000. The bank let me take up to 75% on a 30 year fixed. So heres how the rough numbers broke down:

Purchase price: $66,000 

Repairs: $15,500

Holding costs (6 months): $4,800

Refinanced based on the $135,000 appraisal x .75 = $101,250

I was able to pay off my private lender, pull all of my capital I had into the deal out, got a nice little paycheck on top of that and now I'm achieving Infinte ROI!!!! The property is cash flowing about $350 per month because I'm managing it myself. I can't thank biggerpockets enough! The information provided is changing my life and I can't wait to start my next project! Hope this helps anyone aspiring to achieve their dreams and get that first deal!

Thank you!

-Brett 

[Brett Schickler]

@Leema M. @Kenya Teague Thank you so much for the support! I appreciate your kind words. 

@P.J. Bremner check out the link for the exact numbers! :) https://www.biggerpockets.com/calculators/shared/2...

I have done deals, house hacked my first duplex with a first time home buyer loan, second with conventional financing. So, this was my first creative financing deal. I did however do my homework, so I knew that there was great margin in the deal. I found my private lender via Craigslist, presented the deal with confidence and an assurance that paying him back was my 1st priority, regardless of how the deal went I knew that he was getting paid. I think that gave him some peace of mind knowing that above all else I wanted him to get paid first. I paid my monthly interest payment early every month and thus I feel I've gained his trust and I am confident that he will want to work with me again in the future.