BRRRRSR - Multifamily Buy Renovate Rent Refinance Repeat, Sell Repeat.........2025

[Lynne Hart]

Investment Info:

Large multi-family (5+ units) buy & hold investment.

Purchase price: $119,000
Cash invested: $200,000

This is maybe a new Category: BRRRRSR Buy Renovate, Rent, Refinance, Repeat, Sell, Repeat. Let me explain:
Bought each of two four family buildings in 2016 and 2019. BRRRd and held. New sewers,roofs, tuckpointing and updated units with new leases and higher rent. Selling them together at a 9% cap rate would likely be successful as 8 units are unusual and the price point ($775,000) makes them accessible and unique for someone with a smaller amount who is getting started in bigger buildings.

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

In the beginning it was the price for the opportunity. You could still get cheap stuff and cheap labor, and rents while low still resulted in about a 25% return. As rents grew, it became much more viable to the point that now, 8ish years later we are looking at moving on to the next level. The current market conditions and the property opportunity are what have us considering that!

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

The first four family found on the MLS in distress, and acted FAST. The second, neighboring 4 family we learned about from a tenant-neighbor. The seller had offered to sell for a crazy price. We found our way to him and then his lawyer. He was in foreclosure. His lawyer suggested a short sale and an even crazier low price (44k) as it was now completely vacant. We followed his lead and they didn't even negotiate!

How did you finance this deal?

First one was a commercial loan, second one was cash. Renovations for the first one were in cash, renovations for the second one were from the cash out refinance from the first (first appraisal in 2019 was a 150k value on our 75k purchase.

How did you add value to the deal?

Adding full kitchens, debugging the apartment, upgrading tenants as they moved out. Working with the local police department as the first building was on the problem properties list, and actively working with neighbors and the neighborhood. the 2nd building was completely redoing all the cosmetic things. Opening a few walls, updating kitchens and baths, flooring lighting, etc. Same thing in the first buidling but we took it up a notch with this one.

What was the outcome?

Individually both buildings are worth well more than their purchase and investment price, and together they are even more valuable. AS well they are both stable and producing quite a bit of monthly income. We're happy to sit on them or sell out, pull out our equity and move on and up.

Technically they are 2 four families, so they *could* be purchased with 2 conventional loans - however the appraisal would have to be based on the income method. These babies bring in over 85k Gross and 72k

Lessons learned? Challenges?

UGH so many. This one is/was a C- or worse at the beginning and now they would be about a B quality buildings in a Cish neighborhood.

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

Yup, ME. I'm a realtor and an investor. As a realtor I help others buy and sell multifamilies and connect them with resources as needed via referral. Happy to connect and help or share lists of lenders and other resources.