BRRRR Testimony Part VI

[Brian Tome]

This is another mediocre result, but I am going to share it anyway. We bought this 3 bedroom 1 1/2 bath house in Elkton for $115K in 2019. It was in need of a rehab and we put another $35K into it which included adding a bedroom in the walkout basement before renting it to a nice young couple in June 2020. After renovation value was appraised at $180K, so we refinanced but had to leave $15K in it and it only cash flows about $50/month on a 15 year note with a 10% reserve. We were happy to have equity and very little cash flow because we lived in this unit after we sold one family home and were looking for another.

However, today the house appraised at $207K. Even though it has only increased $27K in value over the last 20 months, we will probably refinance and take out an additional $22K. We will also put it on a 30 year note so it will cash flow about $400/month and we will still have $52K equity - plus the tax benefits.

It'll do.