​Diary of my first Brrrr – managed from across the world

[Aaron Hollingshead]

I thought it might be interesting to share my experience with my first Brrrr property as I oversee the process taking place in New Mexico from my home of residence in Doha, Qatar.

We first saw the house while visiting family over the holidays in New Mexico. New Mexico is a wet-ink state, so we quickly set up Power of Attorney for my sister-in-law to handle any and all transactions required for the purchase of the house as i would not be returning until June.  

The house is a 2 bed, 2 bath 1350 ft place on .5 acre lot. It was a HUD home listed for 42,000. We offered 35k, they countered 39k and we agreed. Estimated ARV 90,000. The next two months proved challenging as we discovered that title companies aren't made to work with people like us! For example, my bank doesn't let me wire large amounts of money, and I'm not in the US to get a Cashier's Check. Therefore we ended up having to mail a check to my in-laws for the full amount, wait 2 weeks for it to clear and have her bring the cashier's check to closing. In the end, all of this was time consuming and we ended up taking the house to the wire – even with a 15 day extension. Not to mention we discovered that notarizing documents in Qatar costs 50 dollars a document!

So at this point we’re in 40500 including closing costs and hoping for 10,000 in repairs before we rent it out for 800 a month.  

We got our first surprise when we went to turn on the electricity – apparently the AC was too close to the meter and breaker box – they needed to be moved to another location. Not to mention the breaker box needed to be updated. Our first 1400 in unexpected expense. My brother-in-law is an electrician and assured me that this was actually a pretty darn good deal as he said he'd have charged 3000 in his city.  

Now onto the fun stuff…the repairs! One note here is that this is in a small town, and I’m not there so finding a contractor was horribly difficult! I used the web, yellow pages and word of mouth and could hardly find anybody to even return my call or email me (most didn’t even have email). That was much more challenging than I’d expected. My father-in-law works at home depot and finally found somebody for us through his contacts who will complete the job in two weeks at a great cost. The house needs new paint, trim, sheetrock repair, doors, door-hardware, kitchen counters, new sink, new toilets, tile and carpet…lots of little things but nothing major. Work got underway a few days ago, and I’m going to share pictures and progress over the next number of days until the job is complete.  Here are a couple of before photos...

[Aaron Hollingshead]

So, the place is finished!  Renovations were done about a month back, but I was hesitant to say, "finished" until I'd actually gotten the place rented out.  Our renter goes into the house in two days and signed a 1 year lease.  It rented quite quickly and she had positive things to say about the place.  

I learned a lot in the process about managing something like this from afar.  Having family help was awesome, but also they also took on too much (I discovered towards the end).  Apparently they took on a lot of the work our contractor didn't do to their liking...consequently in the next project, I'm going to have to explore alternative ways of managing the project from afar as I don't want to burden them.  I also learned that it's exceedingly difficult not feeling like you have control over your place...it takes a lot of trust and patience! 

Ultimately, thought I went 2000 over budget, I was pleased as that was due in large part to the wires and AC being cut as well as having to move the electrical panel and AC for the city.  I actually lucked out having a brother who is an electrician who rewired the ENTIRE HOUSE for 1000 dollars when that should have been a significant cost.  

Overall, it turned out pretty great.  We've actually had 3 unsolicited offers to buy the house from friends and passerby.  For the cash-out refinance, I'll take out exactly what we put in to the place, plus the fees associated with financing so that we can essentially have the house and 30k in equity for free and do the same thing again in a few months.  Thanks to @David Torres for all of the help along the way.  Below are some numbers and photos. 

Original projections - 

39k purchase price

10k repairs

800 Rent

90k ARV

Actual results

39k purchase

12k repairs

850 Rent

85k estimated ARV