BRRRR in Caldwell Idaho

[Corby Goade]

Investment Info:

Single-family residence buy & hold investment in Caldwell.

Purchase price: $210,000
Cash invested: $30,000

This is a BRRRR that our team found and rehabbed for an out of state client of ours. It's a historic home near downtown Caldwell, Idaho- about 25 minutes outside of Boise. Caldwell is one of the hottest areas in our metro market and this home was a diamond in the rough- needed some love, but within walking distance to great restaurants, parks, hipster coffee shops, etc.

Purchase price was $210k cash and it needed a nearly full rehab along with some repairs and updates to the plumbing system. We oversaw the rehab, working with our general contractor and at our client's direction and within their budget. Paint, flooring, full bathroom rehab, partial kitchen rehab, landscaping and other select updates.

The rehab took about six weeks after close and it was rented immediately after by our in-house property management team for $1500.

Our clients waited the six month seasoning period and did their refi. Property appraised for $385k, so they were able to get their all of their cash back and will get a check for approximately $40k at close at 75% LTV.

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

This was a deal that my team performed on behalf of one of our out of state clients- we found and negotiated the deal and helped them purchase it. We brought it directly to this client because we had done a few deals together, mostly turnkey, but they wanted to find a BRRRR and this deal met all of their criteria for cash invested, rehab budget and scope as well as projected ARV.

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

We network with many distressed property owners and wholesalers in our market. This one specifically came from a wholesaler that we've done many deals with. Typically, we get first crack at deals from many wholesalers in the Boise metro market because of the relationships we've built with them.

How did you finance this deal?

Cash for the purchase and rehab, conventional cash out refi.

How did you add value to the deal?

Mostly doing a lipstick rehab- paint inside and out, landscaping, painting kitchen cabinets, quarts counters and a full rehab of the bathroom. We made a conscious effort to make the home feel reasonably modern, but keep some of the historic charm, which is appropriate for this neighborhood.

What was the outcome?

Our clients have never seen this property and have only been to town one time. Our team managed this deal from start to finish. Clients are completing a cash out refi right now to complete the BRRRR process and will get a check at close for approximately $40k as well as some positive cash flow once the refi is completed. Our in-house property management team has been taking care of the tenant side of things post rehab.

Lessons learned? Challenges?

The original rehab budget was $18k for all of the upgrades mentioned above. Once our crew got to work, we found that there was some damage to the main sewer line and floor drain in the basement. That added about $4k to the repairs. Because this was a wholesale "as-is" deal, we did not have the opportunity to scope the sewer line, but we advised our clients that damage was possible up front. There was plenty of room in the deal to make those repairs as needed, scope those sewer lines on old homes

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

My team acted as the pros in this case- we performed this entire process on behalf of our client.