BRRRR Property With Decent Upside

[Drew T Heberer]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $130,000
Cash invested: $15,000

BRRRR Strategy Investment.
PP $136,000
Rehab + Closing Costs $15,000
All in $144,000
Loan $133,000 Remaining
6 MO interest only 5yr ARM 25 yr amortization
Refi at month 6 into 30 yr fixed
ARV $195,000
Appraisal $200,000

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

The potential to put little in and BRRRR the property and cash flow plus get our money out. There is also an AMAZON distribution center coming up near this property less than 3 miles away.

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

Facebook Marketplace. I just reached out to the seller and offered her 65% ARV, she took it.

How did you finance this deal?

Traditional Bank financing at a small bank that offers 90% LTC funding with 6 mo interest only 5 yr ARM 25 yr amortization.

How did you add value to the deal?

Remodeled the entire home.

What was the outcome?

Appraised for $20,000 over my initial ARV estimate. We will be refinancing at month 6 to a 30 yr fixed and pulling out money out and about $5,000 cash.

Lessons learned? Challenges?

The small things in the budget for rehab will kill you... Just like the books tell you. First time BRRRR we came in about $1,500 over budget. Which was not bad, but not perfect either.

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

Myself, as I am a REALTOR.