House #4 - Kansas City BRRRR

[Steven May]

Investment Info:

Single-family residence buy & hold investment in Kansas City.

Purchase price: $145,000
Cash invested: $3,000

Purchased this Single Family Home on the MLS for $145,000 in Kansas City in a area called Waldo. I already owned 2 houses on the street so once I saw it listed for sale way under market value I knew I had to have it! Purchased vacant. Rehab was $8,692 - foundation work, touch ups of paint, new tile in kitchen & LVP throughout the main floor, and new appliances. Purchased with a hard money loan. Signed a lease with tenants before the first payment was due. 7 months later the appraisal came in at $220,000. 75% LTV cash out refinance left me with just $3,000 in the deal. Cash flow of $272/mo gives me Year 1 Cash on Cash return of 105%. BRRRR

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

BRRRR opportunity 4 doors down from where I live and on the same street as my Air BNB.

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

On MLS and I am a licensed agent so I get to represent myself.

How did you finance this deal?

10% down hard money loan.

How did you add value to the deal?

Light interior rehab.

What was the outcome?

Cash flowing SFH and got all my money back 7 months later.

Lessons learned? Challenges?

Just transitioned from W2 to 1099 employment so the cash out refinance was a bit tricky.

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

I am the agent - Of course I recommend myself!

[Steven May]

Quote from @Alex Bekeza:

@Steven May What was the financing solution on the back end once you transitioned from W2 to 1099?

 I worked with a conventional loan officer here locally who is able to do Non-QM loans - took a bit longer than expected and the rate is higher than a W2 conventional loan. Need to have good documentation of 1099 income coming in and monthly expenses. 5.1% at the time I wasn't thrilled about but now with what the interest rate market has done I am content with my rate being locked for 30 years.