First BRRRR and rental property

[Brandon Hall]

Investment Info:

Small multi-family (2-4 units) buy & hold investment.

Purchase price: $307,500
Cash invested: $70,000

I purchased for just over 300K, extremely neglected piece of real estate, with a partial view of Portland Harbor. After a long rehab, involving structural improvements, full cosmetic redo, new electrical, plumbing, and heating; I was able to complete the BRRRR with a newly appraised value of $540,000. The two units currently bring in just under $5000 a month, and cash flow after everything for $500 a month, while also gaining me ~$200K in equity and getting all but $20K of my investment back.

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

To get some cash flow!

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

On market deal that most investors strayed from because of the rot/structural damage.

How did you finance this deal?

Hard money.

How did you add value to the deal?

Completely remodeled every inch. Also added bedrooms.

What was the outcome?

A successful BRRRR.

Lessons learned? Challenges?

Fast construction saves money.

[Brandon Hall]

Quote from @Sean Hudgins:

Sounds like a great deal! What were the terms on your hard money loan? 

At the time I believe this HML was around 11% with 85% of purchase and rehab funded. I believe it was 3 points on purchase as well. Holding costs were pretty solid for this deal because of the extent of the rehab, and removal of the tenants, but I refied right at 6 months.