Rate my first BRRRR

[Guillermo Perez]

Can someone please let me know if this is ok for my first BRRRR.

I got a $200k HELOC on my primary residence to help fund my first BRRRR. I bought my first investment property cash, for $101K. After closing costs, it was about $107K. The ARV was believed to be around $235k so my agent told me to try to stay all in around $176K. The house was a 3 bed one bath. After adding an extra bedroom and bathroom and rehabbing the house, I was well over budget. I was all in for $203K. I am in the process of refinancing. The appraisal came in at $245K, but they are only loaning me 70% of the ARV. After refinancing, and all the closing costs, I'll probably get around $156K cash to pay back my HELOC. I did save some money to have as back up. I will be paying about $44K out of pocket back into my HELOC. Is this ok, or is this a terrible first BRRRR?

P.S. I do not want to sell because my profits after closing costs will be about $15K. If I keep it and rent it out, I will have around $70K in equity

[V.G Jason]

Quote from @Guillermo Perez:

Quote from @Jonathan Klemm:

Congrats @Guillermo Perez!   Great deal!

Those deals are rare and starting off with such a good experience is amazing.  What was your top 3 biggest lessons learned?

With respect to paying $44k off on your HELOC, I personally think that is totally fine and a great start. If anything, at least wait a year so you don't pay short-term capital gains on the sale of the property.

I need to find some more deals like that here in Chicago...where in Houston was this property?

 Top 3 things I learned 

1. Contractors will make or break your rehab. 
2. get 3 quotes for everything. 
3. closing costs for refinancing is not cheap and you definitely need to take that into consideration when running your numbers. 

The house is on the east side of houston near 2 universities but it is a rough neighborhood. 

 You bought near UH in the ghetto?

Overall not terrible on your first BRRR, but the cost of the reno is almost the same there and the same in the Heights, West U, etc., obviously the barrier to entry is different but so is the ARV. My only remark to make is really focus on quality locations next time. Otherwise, think you learned the other stuff and your systems will refine as you go.