Third BRRRR, Kansas City, MO

[Johny Omaga]

Our first pre-foreclosure deal.

Background:

The seller came to us in response to our mailing campaigns. The seller defaulted on his mortgage, was 8 months behind and had a week until his home was to be sold at auction. He asked for our help and fortunately, we were able to cure his loan the day before auction! His home had almost 40k in equity. However, we decided to do a full rehab and keep it in our portfolio as a rental. Our goal for the year was to flip all our homes and save for an apartment but I couldn’t justify the margins. After the repairs and after closing costs and more importantly TAXES, we have decided to keep it for a year as a rental and sell next year so we can 1031 into another property. In my opinion, the rehab was a bit overkill (and took way too long) but now have learned and will make sure to cut costs where ever possible on our next project to protect our bottom line. In conclusion, We will now continue to target and help these sellers. Ultimately, we’ve helped someone out of bankruptcy, gave them peace of mind, and created a deal where both parties were happy. 

Will update this post with numbers soon