First BRRR and Short Term Rental rolled in one

[Rhonda McDaniel]

Investment Info:

Single-family residence other investment.

Purchase price: $64,555
Cash invested: $6,200

First Attempt at BRRR and Short Term Rental
Purchased on Construction loan with $27,569 construction hold back.
Extra Rehab costs (plumbing, A/C, and roof unknowns): $10,000
Down payment and closing costs : $13,656
Cash out Refinance (cash back to us after fixed and rented): $17,452
Total Out of Pocket after refinancing: $6,200

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

I had done a construction loan before and had just cash-out refinanced after 2 years. I wanted to get a deal that could cash out refi. in 6 months. I became interested in Short-Term Rentals listening to other investors and the Short Term Show on Bigger Pockets.

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

Auction.com. bid on it. stay by your computer until you win. I'm a Realtor, and I recommend using a realtor for your auction.com bids...they can wait on the line until the last minute of bidding is finished and win you the deal!

How did you finance this deal?

Conventional loan with construction hold back costs from local bank.

How did you add value to the deal?

Turned the Sun room into a 3rd bedroom by adding a closet. Relocated the front door out of that sun room. New floors, fresh paint, all new kitchen and bathroom.

What was the outcome?

Time Frame: Bought at auction.com...bid in November and won...Quite Title suite followed paid by seller...closed March 1, 2022...Finished rehab July 1, 2022. Opened AirBNB July 4, 2022

Cash flow varies by month as this first year we are doing a Short-Term Rental. Winter months have not been good in Tulsa, but summer months saw cash flow of up to $600 month...Will have the average for the year in April.

Lessons learned? Challenges?

Lesson learned: get those construction quotes during inspection periods. Go with the more expensive quote for construction hold/back costs.

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

I'm a Realtor and was my own agent on this deal.