Awesome single family that a family inherited and leased to a family member, they moved out and the owners did not want to bother updating it. It was also the first deal where I got my ankles chewed up by fleas. This was my favorite renovation so far and I love the kitchen. We had $0 of our own money in it again and considered flipping it, but ended up BRRRRing it instead.

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

We just love the BRRRRs! The homes here are older and many have never been updated, but the bones are good. We come in and tear out everything dated, fix and major issues, and make them beautiful. Then, we offer the best rentals in the neighborhood to try to attract the best tenants at a reasonable price. When a "luxury apartment" with crappy laminate floor, mdf cabinets, and no space rents for $1300/month, our 1700 sf 3 bedroom with granite countertops and plywood cabinets look really good.

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

This was a referral from our previous deal. The lady liked what we did with her place and told her friends about us. I reached out and made an offer with room to come up 10k if they wanted to negotiate. I was surprised that they accepted it immediately, but was excited for the project.

How did you finance this deal?

We used a local bank with a 90% purchase and construction commercial line of credit and private money to keep us solvent while we waited for our draws.

How did you add value to the deal?

We tore out the old kitchen, installed Lifeproof LVP throughout, replaced all the cabinets with Choice Cabinets (which we are distributors for so we get good prices), added an island, Calacatta Glacier Quartz countertops, new vanities, new fixtures, reframed a wall for the storage shed which had termite damage, chemically treated the house for termites, painted, and replaced all interior doors.

What was the outcome?

We got great tenants in there at our target rent. Our appraisal came back at $225,000, which was a little higher than we expected at the beginning of the project. We thought it would be $205,000, and the pre-rehab appraisal came back at $194,000 which I knew was low. We were all in around $133,336 so we walked out of our refinance closing with a $15k check (after 5k in closing costs). Rates went way up so our cash flow took a little hit, but still over $100 with vacancy, capex, and repairs.

Lessons learned? Challenges?

This was a smooth project. I learned to wear long pants and boots for initial walkthroughs. We learned adding an island is well worth the price, and upgraded countertops also can be well worth it. We also learned that replacing screen soffit venting with vented Hardiplank is a quick clean way to do it. Also if only one room in the house has paneling, there is a good chance drywall is behind it.

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

Our local lender was good. So was the refi company GMFS Mortgage. And our title company Title2land was great as usual.