Just Completed Two BRRRRs

[Tony Castronovo]

I am excited to be closing on two refi's this coming Friday....both of which I applied the BRRRR strategy. These are my 3rd and 4th property, respectively. Definitely some things I learned that I plan to apply on #5. Deal analyses below:

Property #1

• Purchase Price:$82,000
• Projected ARV:$105,000
• Post-Rehab Appraisal:$111,000
• Estimated Rehab: $11,000
• Actual Rehab:$14,518
• Financing:1st close: HML for 90 days at 9.99% and 2 points; 2nd close: 30-yr fixed at 4.375% and 0 points
• Closing Costs:$6,982 (2 closings)
• Rent:$1,200
• Cash Flow: $327 (after maintenance, vacancies, etc.)
• Cash on Cash Return:11%
• Timetable:Rehab Complete – Day 15 (started Day 1), Tenant Occupied – Day 60, Refi Complete – Day 83

Property #2

• Purchase Price:$120,000
• Projected ARV:$160,000
• Post-Rehab Appraisal:$162,000
• Estimated Rehab: $18,000
• Actual Rehab:$18,034 (amazing I got so close on this one)
• Financing:1st close: HML for 90 days at 13.99% and 3 points; 2nd close: 30-yr fixed at 4.5% and 0 points
• Closing Costs:$11,977 (2 closings)
• Rent:$1,420
• Cash Flow: $258 (after maintenance, vacancies, etc.)
• Cash on Cash Return:7% (not great, but at least I have some equity)
• Timetable:Rehab Complete – Day 25 (started Day 10), Tenant Occupied – Day 44, Refi Complete – Day 50

Key Lessons Learned:

• Be super diligent on the refi process.  Start early and follow through on every step.
• Prepare an "appraisal packet" (Thanks @Yinmeng Yu ) - my appraisers were very happy (never hurts to kiss some butt at this stage). I included before/after photos, rehab items and cost breakdown, original appraisal, etc.
• Contractor I used on Property #1 was pretty good and efficient with his time.  It was a labor only deal.  Good part was I controlled all material costs and got some great deals.  Bad part was that I was heavily involved.  The contractor on Property #2 was more expensive but nearly turnkey.  I'm glad to have two good options for the next property.
• Did my own listings and tenant screening.  That's a whole blog in itself.  But definite lessons learned.
• Super excited how quickly we turned around Property #2.  50 days from one loan to another is pretty awesome in my book.  Looking to repeat that part of the process.