Deal Diary: North side 110% BRRR completed

[Henry Lazerow]

Location: North side Chicago on the boarder of Edgewater and Rogers Park.

Purchase: $412k net used a close cost credit. 

Rehab budget: Confidential as may flip it.

Newly appraised value: Confidential as may flip it.

Cash out refi amount: 110% of what I put in (rehab+downpayment). Paid myself a bit back for my time. Did not max out the cash out refi but kind of wish I did as rates are going up.

Property: Legal 4 unit purchased $412k net at 5% down. I bought it off MLS last year and still don't understand how got it so cheap. I think it's because the units are tiny (560 sq ft) so other investors passed it by and the tenants were on 1 year leases at very low under market rents.

Rents when bought: $580, $580, $620, vacant. Year later after rehab: $1100 (I re-signed an old tenant who had been there 14 years and plans to stay long term), $1250, $1250 and owner occupant (my unit). The old tenants were way under market.

I kept rehab affordable and mainly did new kitchen/bath and windows. I left all the old galvanized piping which works fine, left the electric floor heating system/window ac units, didn’t touch the layout or move any walls, layed waterproof laminate on top of the old floor, repainted the trim/skim coated any gunked up spots on drywall.

Style: What’s hot and sells right now is the all white look. I did quartz kitchen with square cut sink all in for $1000 a unit installed direct from an owner of warehouse. I used real marble in bathroom backsplash which was only around $50. White shaker cabinets from Lowes were around $1000 a unit. These relatively inexpensive finishes made the place look nice and stylish.

Before photo: 

After photo: 

Rehab surprises: When I bought the property, it had a layer of cement that looked OK but over the winter this layer started to crack everywhere. I ended up having to spend $3700 on cement. Also gutters leaked in winter bad ended up replacing $1200. 

If any questions please feel free to reach out by PM. House hacking is what I recommend anyone looking to invest for the first time. For management and tenant screening I use Cozy which has been awesome service. Still living in a unit currently and really like the area plan to stay here until the next project!