BRRRR Quadplex in Indiana

[Caleb Drake]

Investment Info:

Small multi-family (2-4 units) buy & hold investment in Terre Haute.

Purchase price: $60,000
Cash invested: $7,500

This is my first BRRRR property. It was both my first out-of-state purchase/rehab and MFH. We expected to gross $2.1k post repairs and budgeted around $20k for the repairs. All in, we had $50k invested in this quad w/ an ARV of $102k

The units rent for $2350 total and net $850/mo after PITI ($937/mo), CAPEX, 8% management fees, and utilities.

We refi'd into a commercial loan on a 5/1 ARM and left $7.5k in the deal. We used the refi to purchase another triplex in the same city.

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

The potential to add four doors to my portfolio with little money locked in.

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

MLS

How did you finance this deal?

Initially, conventional in my name. Post rehab, commercial in my LLC.

How did you add value to the deal?

Rehab

What was the outcome?

Not perfect, but decent BRRRR with $7500 remaining in the property.

Lessons learned? Challenges?

Evaluate your ARV without bias towards your goals. Check the comps and estimate low to make sure the numbers work. We expected a $125k ARV based on comps from our agent. This was an out-of-state deal and came in low at $102k.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

No.