First Investment BRRRR

[Patrick Rhodes]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $62,000
Cash invested: $35,000

I purchased the single-family residence for $62,000 using a private money loan for $105,000. I paid an additional $35,000 out of pocket to do a complete remodel/renovation. I now have it rented at $1600/mo which is earning $489/mo in cashflow.

I refinanced it for $205,000 which cashed me out at $65000 in tax free money. The current appraisal value is $285,000 which gives me $80,000 of equity in the home.

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

It cost me very little out of pocket, I borrowed almost all of the money from a private source and bought the house for a price that was way under market value. This was my first investment and I knew it would be a catalyst and open more doors for me to enter the investing side of real estate sooner than I thought.

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

Off-market.

Lessons learned? Challenges?

The lesson I learned would definitely be to add a bumper to the costs you're estimating for the remodel. If you estimate 100k, budget for 120k.

The biggest challenge would be finding honest contractors that show up and do the job right. Also prices of materials were sky high because inflation was on it's way.