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Updated almost 3 years ago,
Detroit BRRR (Buy and Hold)
Investment Info:
Small multi-family (2-4 units) buy & hold investment.
Purchase price: $144,000
Cash invested: $125,000
Renting this property to-date that has an ARV of $525,000 and is currently renting for $4,700 per month with a debt service of $2200 per month.
What made you interested in investing in this type of deal?
Off market, foreclosed property that I gained access to. I also knew this historic, large property neighborhood well and the trajectory of the area.
How did you find this deal and how did you negotiate it?
Bank owned, foreclosed property that I used a combination of 3rd party investor financing and a personal line of credit for purchase and rehab dollars.
How did you finance this deal?
A combination of 3rd party investor financing for the purchase and working with a partner and using my own personal line of credit for rehab.
How did you add value to the deal?
Over $125K in capital improvements and rehab. The property is about 5,800 square feet in size, two kitchens, 8 bedrooms and almost everything was remodeled.
What was the outcome?
The property is being rented now under a triple net, 5-year lease to a non-profit organization that is servicing transient women, small families and returning female veterans.
Lessons learned? Challenges?
I under-budgeted for the rehab and had to go and get additional investor financing that I was fortunate to have access to. It was GREAT to have a partner on the deal that is much, much more experienced than I am and is still a partner on various deals with me. This deal was done about 3 years ago.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
I worked with a 25+ year real estate professional who is also an agent and was also my partner on the deal. He's a very experienced and successful developer that has done over $1.5 billion in real estate deals in the city of Detroit -- including large multi-family, commercial, casino, mixed use, single family, and more.
