Delayed Financing for an effective BRRRR

[Jeffrey Allen]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $105,000
Cash invested: $2,500

Purchased the house off market from another investor who had to evict a tenant. Ripped out carpet on first floor and installed LVP. Remodeled entire bathroom. Used a private money lender to make a cash offer and kept title open during the first closing to do a cash out refi. As interest rates were ticking up and the seasoning period longer, I did delayed financing instead and received 75% of the ARV and was still able to pull out almost all of my cash making this and effective BRRRR.

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

Could buy for a great price off market perform some renovations and be able to pull out almost all of my initial capital.

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

A real estate agent that I have done prior investing with brought me the contact since he did not want to do this deal. Negotiated with Seller to lower price since there were issues with the bathroom and this would be a cash offer.

How did you finance this deal?

Cash offer with private money lender until repairs were completed. Then did delayed financing to get most of my invested capital back.

How did you add value to the deal?

Totally remodeled the only bathroom, added luxury vinyl plank on first floor and bathroom, painted and replaced the drop ceiling tiles.

What was the outcome?

The property appraised for $148,000 and I was able to pull out 75% and get back most of my initial capital.

Lessons learned? Challenges?

Difficult finding a contractor to perform the work needed. Rates were moving against me so I did delayed financing instead of cash out refi since it needed a seasoning period and delayed financing did not.