Final BRRRR numbers Gary, IN

[Marcus Holloway]

I thought I'd share the final numbers of my first brrrr. 

My partner and I decided to rehab a home in the neighborhood we grew up in. The home, in Gary, IN, had been in disrepair since we were in HS (we graduated in the late 90's). Obviously, our goal is to create wealth, but this deal had the added bonus of both working with a childhood friend and adding value to the community we grew up in. 

We were fortunate to have a great relationship with, in my opinion, one of the best GC's in NW Indiana. He (the contractor) is also from the neighborhood and the father of a mutual friend ours. The project was basically a full gut and could have been overwhelming with the wrong contractors. 

The house was a 3 bed, 1 bath (1000sqft) typical for the area. We purchased the home using cash, personal loans and CCs. Since we purchased the home in an LLC; we utilized a commercial loan for the cash out refi once the rehab was done.

Here are the numbers: 

Purchase price: $5,000

Rehab costs: $55,000 (roughly)

ARV: Appraised for $70K

75% LTV: 52,500

closing costs/banks fees: $4000

Cash out: $48,500

Fortunately, we got great tenant almost immediately after the rehab was done. We stole a tenant from a bad landlord who lived up the street lol. She saw the rehab in process and asked our GC if it was for rent. She's a nurse and signed a lease that started about 2 weeks after the final touches were put on the house. 

We transformed a home that been an eye soar for the past decade into one of the better homes on the block. 

We're satisfied with the final numbers. 

What do you think, BP?