Second Investment, First BRRRR

[Chris Allen]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $45,500
Cash invested: $20,000
Sale price: $143,000

Contributors:
Jeremy Fay

Purchase: Second property purchased, first BRRRR. Found through a wholesaler who was originally asking $65k, ended up agreeing to $45.5k. Purchased via private money loan of $50k from an investor I had met a few months prior at a Meetup. Property was a 2:1 with a garage conversion making it a 3:2.

Rehab: Property was in decent condition but was in a less desirable part of town. Replaced flooring, HVAC Duct work, Hot Water Heater, Light Fixtures, roof and a fresh coat of paint.

Disposition: Rented this property out for $825/mo, applied for a refinance and the appraisal came in very low (expected $100k, came in at $75.5k). Was able to Refi to pay off private money loan and remained rented to the same tenants at $825/mo for the last two years. Tenants moved out, property required new paint, flooring, and a deep clean. Listed property for $138k and closed at $143k. Was able to walk away with a $77k profit thanks to my awesome agent Jeremy!

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

Found BP and after buying my first HH Duplex, I had the itch to do a "real" investment using the BRRRR method and private money.

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

Found through a wholesaler and after the wholesaler dropped the price twice, was able to offer him a fast close at $45.5k.

How did you finance this deal?

Private Money.

How did you add value to the deal?

Basic touch ups (flooring, paint, light fixtures, roof, and landscaping).

What was the outcome?

Cash flow of about $400/mo for two years and sold for a Net Profit of $77k.

Lessons learned? Challenges?

-Learn to run better comps (refi appraisal came in $30k under what I thought)
- Manage tenants better with at least yearly property inspections (tenants left the house in bad shape when they left)
- Even when you are not able to pull your money back out in a BRRRR, real estate still makes sense.

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

Jeremy Fay at EXIT Realty in Copperas Cove TX.