First BRRRRR Investment

[Nathan Dehn]

Investment Info:

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

Purchase price: $85,000
Cash invested: $70,000

My mother in law and I invested in this BRRRR property in a transitioning neighborhood of St. Louis. The rehab took 9 months because of contractor fails and covid. It was a nightmare of a property but learned so many lessons! And the result? Bought for $85k , rehabbed for $70k, rented for $950/unit, and refinanced to only leave $15k in the property that appraised for $200k.
This deal had it all! contractor skip town, squatters, theft, bats, rats, and crazy tenants!

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

Already bought 2 buy and holds and wanted to dip my toe into something a little harder.

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

FSBO on zillow. And, bought it at list price.

How did you finance this deal?

Used a commercial loan and mother in law financed the cash needed.

How did you add value to the deal?

We did a medium rehab. New floors, paint, doors, kitchen, bathroom, and a decent amount of plumbing and electrical.

What was the outcome?

It was a success! But, extremely stressful and aged me 10 years! Right now, it's renting great, in an up and coming area that's constantly having homes flipped. Giving us added equity and still a good amount of cash flow.

Lessons learned? Challenges?

So Many!! The squeaky wheel gets the oil! Need to stay on your contractors, even if they are in a difficult position because of covid.
Don't list the property for rent before the property is fully ready if you know your contractor is being slow.
Be willing to have difficult conversations with your family on cutting bait.
Put on chimney caps so bats don't get into the unit and freak your tenant out.
Always remember that things can and will go wrong. But, worth it in the end!

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

Yes, my Krista my mother in law and myself. :)