BRRRR Testimony Part V

[Brian Tome]

Well this one does not look nearly as good as the others, but here goes.  We bought this 3 bedroom 1 1/2 bath house in Elkton for $55K in 2019. It was in need of a complete rehab and we put another $23K into it which included adding a bedroom and bathroom in the walkout basement before renting it to a nice young couple and their three little girls in May 2020. After renovation value was appraised at $137K, we took $24K out of it and it has cash flowed about $400/month on a 15 year note with a 10% reserve.

We were happy with getting a lump of cash out in the beginning and pleased with the cash flow, but today and the house appraised at $160K. Since it has only increased $23K in value over the last 20 months, it probably isn't worth refinancing and taking additional money out. We could make it cashflow a little better by putting it on a 30 year note, but either way the $66K equity is nice - not to mention the tax benefits we gain from depreciation.

Not a home run, but a solid base hit!