Need help! BRRRR gone wrong

[Jonathan Paul Shortt]

I, like many, fell in love with the BRRRR strategy and was constantly looking for property that would fit this category. I am in the Dallas area and found a property through a wholesaler in a small town (but growing rapidly) 30 minutes outside of Dallas. I jumped on the opportunity. My estimations were:

PP: $56,500

Rehab: $42,000

ARV: $127,000

Rents: $1250

The property was in worse condition than advertised by the wholesaler, but nothing too major that hadn’t been accounted for.

To keep a long story short, the city has been a nightmare, we have been issued multiple stop work orders for ridiculous reasons (trash in the front yard). I now have $115,000 total into the project and probably needs another $20,000 to meet the city inspectors expectations. It has taken 2 months longer than initially thought it would. My contractor is MIA, he’s tired of the project.

My question is would you try to get out of this ASAP and sell at a loss or push forward and finish the project, refi and rent.

Thanks for your input!

[Richard Helppie-Schmieder]

@Jonathan Paul Shortt which town are you in? Without knowing too much, I would recommend finishing the home.

1.) A finished home can be refinanced or sold to a much larger buyer pool

2.) A finished home can be rented

3.) Coming in mid-rehab with red tags is a nightmare for an investor behind you and you couldn't command the value that you put in anyway

Chalk it up as a lesson learned and get the product to market!