BRRRRnB Deal in Surf City, NC

[Sean McDonnell]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $235,000
Cash invested: $100,000

Purchased off market at 235k. House was a total gut job, but the roof was only 5 years old, HVAC only 7 years and the house had a newish deck. We purchased with a conventional loan, 20% downpayment. We did a interior remodel putting about 100k into the rehab including furnishings. The house appriased 8 months after our purchase at 472k. We did a cash out refinance and pulled out 140k which will serve as a down payment for 2 new construction townhouses. We are now renting the house out on Airbnb.

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

I was looking for our first value add deal for 2 years before this.

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

Saw a dinky sign posted in the yard as I was driving by. I called the owner and put in a offer sight unseen without going inside. He said he had an offer at 230k so I told him I would do 235k.

How did you finance this deal?

Conventional loan to purchase. The house hadnt been updated since it was built in the 70s but it was livable.

How did you add value to the deal?

We gutted it down to the studs, added another bedroom and did a nice remodel with lvp flooring, granite counter tops, stainless steel appliances, and a nice bathroom.

What was the outcome?

We were able to pull almost all of the cash out after the refinance. We left 20k in the property which we were fine with.

Lessons learned? Challenges?

Initial rehab estimate was 70k, turned out to be 90k once we broke into the walls and found the windows all needed to be replaced.