BRRRR in affluent town of Randolph, NJ

[Eugene Onishkevich]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $230,000
Cash invested: $200,000

Hello Bigger Pockets community!

I'm excited to share with you my recent BRRRR (Buy, Rehab, Rent, Refinance, Repeat) success story in the charming and affluent town of Randolph, NJ. This journey began with a single-family residence, poised as a buy & hold investment, and it's a testament to the principle that if you find a good deal, the money will follow.

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

My interest in this property was sparked by its location in a nice town with excellent schools.

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

The deal popped on Zillow, listed at $339,000. I contacted the listing agent immediately and made an audacious "all-cash" offer of $220,000. Despite not having the cash on hand, this strategy paid off. My offer stood out because it was the only one without financing contingencies. After some negotiation, we settled on a purchase price of $230,000, with the stipulation of closing within 30 days.

How did you finance this deal?

This is where the concept of using OPM ("other people's money") came into play. I secured the funding and closed the deal just before the pandemic hit, which was a crucial timing.

How did you add value to the deal?

The property underwent a full gut renovation, including the addition of a full-sized second floor and a finished basement. We didn't skimp on quality, opting for high-end finishes that significantly boosted the property's value and appeal.

What was the outcome?

The property now stands as a testament to the effectiveness of the BRRRR strategy, with a positive cash flow and significant equity addition.

Lessons learned? Challenges?

The journey wasn't without its hurdles. We faced a zoning challenge that required us to obtain a variance for the second-floor addition due to front setback restrictions. Additionally, the pandemic led to an unexpected increase in material costs by $40,000 (on pick price moment we've bought som 2x4s for $11 a piece!!!) , and the construction period stretched to almost a year. Despite these challenges, the project was a success.

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

Throughout this journey, I've built a network of reliable contractors. If you're in need of professional services, feel free to reach out for recommendations.

I hope my experience provides insights and inspiration to fellow investors. Remember, in real estate investing, sometimes the key is to find a great deal first, and the rest will fall into place.

Looking forward to hearing your thoughts and answering any questions you might have!