This was a perfect example of a B.R.R.R.R. project. The real estate investor bought this home by finding and negotiating the purchase directly with the homeowner. They then quickly renovated the interior, hired a property management company, placed a tenant and refinanced all within 5 months! The net cash flow is $265 on a $100k loan, as well they were able to pull out just over $20K in equity. We provided the purchase and renovation loan as well as the refinance with a 30yr fixed rate loan.

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

This was the first project we completed with this particular investor out of Gainesville, FL. They were well qualified for a 30yr fixed rate take-out loan, so the BRRRR method absolutely worked beautifully for them. The investor had a game plan right from the start. They had their property manager lined up, knew the market inside and out, and targeted a renter demographic instead of a homeowner in their approach to the renovation.

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

This investor was referred to me because of a connection in a local real estate investing club there in Gainesville FL. Personal referrals are the gold standard in this business, and if you treat your clients well they will go above and beyond to help you help them.

How did you finance this deal?

We provided an opportunity for our capital investors to participate in the origination of this loan through our turn-key private lending solution. Not only did they get a great rate for the 5 months we held the Buy and Renovate loan, they were also able to participate in a portion of the upfront points collected. Their annual return was over 10% in this case due to being able to reuse their money at least 2x in one year.

How did you add value to the deal?

By being able to close quickly and streamline our approach to underwriting the investor was able to close faster than the competition and be able to get all the funding needed to purchase and renovate this property.

What was the outcome?

The investor was able to complete the renovation in just over 2 months, retain their property manager, who already had a tenant ready to lease, and we completed the process of refinancing qualification, and close on the 30yr fixed rate loan all in under 5 months! Our client was very happy, our capital investors were very happy and we have been able to do repeat business!

Lessons learned? Challenges?

Having a game plan is so critical. Knowing what parties are helping in what fashion is the key to success. Being able to put together the multiple pieces into a seamless transaction is what separates the casual investor from the professional.