My First Rental using the BRRRR Strategy

[Gabriel Escamilla]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $80,000
Cash invested: $124,000
Sale price: $80,000

3 Bedroom 2 Bathroom 1950s Build

What made you interested in investing in this type of deal?

I was looking for my first rental property to purchase after I purchased my personal home.

How did you find this deal and how did you negotiate it?

A family member has multiple properties and I offered to purchase it after he told me his tenants were 6 months behind on their rent payments.

How did you finance this deal?

I paid cash for purchase of the property. To fund the Rehab I pulled out all of my 401k (penalty free under the "Cares Act")

How did you add value to the deal?

I did a full rehab on the property.
New Kitchen
New Bathrooms
New Flooring
Interior and Exterior Paint
New Doors
New Windows
New HVAC (AC adds to monthly rental income)

What was the outcome?

My ARV estimation was $140,000 (as of Late 2020) when I initially purchased the property.
After investing $124,000 into the property and renting it out, I refinanced the property with an Appraisal at $144,000 at 80% LTV (in March of 2021)
I was able to pull out about $111,000 from the refinance.
The monthly rent is $1,200 and I left about $13,000 in the property
Monthly cashflow is $250 a month
My Cash on Cash Return is about 15%
As of early 2022 The property is worth $165,000

Lessons learned? Challenges?

Proof of Concept