My hope is that sharing this might motivate another BPer that was in the same position I was just 12 months ago (or even a couple years ago for that matter).

It's hard to believe it's already 3 weeks into 2020...things have been moving SOOOO incredibly fast already while our team has been in the process of finishing the refinance (BRRRR) of 3 single family homes, along with closing on the acquisition of a commercial/small multi-family apartment (13 units total) at the end of this week. It just suddenly dawned upon me that I hadn't quite taken the opportunity to look back on 2019 as a whole and simply digest everything that happened - definitely a B-LU-RRRR (see what I did there).

For the majority of the year my "day job" encompassed managing a 15 agent brokerage focused mainly on assisting others with buying and selling their primary residence, before eventually switching brokerages and starting a new team at my current brokerage. The brokerage I previously managed finishing the year with 173 closings and over $40 million of sales volume (mind you this is Louisville KY with a $200k ave sales price). By night (and afternoons and weekends and lunches and dinners and lost sleep), my investment partners and I also managed to successfully BRRRR 7 homes with exactly $0 out of pocket - if you don't count gas and LOTS of coffee. I realize for some on here that is child's play, but for all us other mere mortals, it's a reminder that you gotta start somewhere. Here's my recount on how it all happened:

First a quick backstory: Between 2014 and 2018 my friend and I managed to purchase 4 single family rentals using money out of our pockets for down payments using mostly commercial financing, along with some private financing...plus lots and lots of sweat equity. This included a house going up in flames, a nightmare of an insurance claim and then eventually a 1031 exchange into a dream-of-a-student-rental house. Since that time we managed to partner up with a much more seasoned real estate vet that has provided invaluable insight, mentorship and fuel to the house-buying fire.

NOTE FOR NEWBIES: this person that I consider a business partner, and more importantly a mentor, came directly from BiggerPockets. Not because I asked him to mentor us, but because I brought him a handful of investment deals from the start. This led to us "talking shop" for hours on end (cause who doesn't love talking real estate?) and inevitably building a great level of trust - over time - as in years. AKA - figure out how you can bring value to others!!

Eventually this person brought us a wholesale deal in late 2018 (he made $8k wholesale fee) and we bought it using his financing with a 1st lien position at 12%...yes approx. 8% higher than the going bank interest rate. We ultimately BRRRR'd that house in 3 months to get him his money back, and a house with $0 out of pocket (light bulb!). Lesson learned: The cost of the money was irrelevant to the value of trust that was established in this deal. Btw, every month we are technically making infinity returns on that house :)

From there we began to realize that everyone else's strength brought a unique value to the table, which ended up with us forming a partnership in Spring of 2019...which then snowballed into us BRRRR'ing 7 single family homes with ultimately $0 of out pocket. And yes for you "negative-nancies" out there, we do have to split the cash flow and equity (and debt)! But 50% of a watermelon is better than 100% of a grape as Mark Cuban would like to say.

Here's the financial snapshot:

~$650,000 worth of property
~$520,000 worth of debt service
~$130,000 worth of equity ($43,300 each)

~$1,300 cash flow (after PITI)
$0 out of pocket
Infinity ROI
Infinity knowledge
$5,000 set aside for future repairs (money from bank refinance)

Lessons Learned:
-Plumbing is one of our largest expenses
-Check all the electric, worth the peace of mind
-Granite is worth the extra cost even on <$100k homes (better ARV, tenant proof and better tenant)
-Section 8 isn't so scary if you've got a good tenant
-Having a truck is a game-changer!
-A good contractor(s) are invaluable
-A relationship with a local lender pays dividends
-Make mistakes the sooner the better
-Never know who you're going to rub shoulders with, stay on your A game

Here's a few pics: