Diary of my first BRRRR

[Rivy S.]

I'm going to use this thread to chronicle my first BRRRR. All advice and suggestions are welcome!

The property is a 4/1.5/1 located in SE Dallas. It is currently tenanted on a month to month lease for $825.  My offer of 69K was accepted on Monday 1/23, and we will be closing on Feb 1st.

Until that time, I am trying to figure out insurance, what my property management options are, and to begin researching cash out refis.  

I'm considering doing a wraparound note on this.  If I decide to go that route, I will probably not rehab, keep the tenant in place until the 6 month seasoning has passed, do the refi (the question is how much it will appraise for without any work), and then sell with owner financing.  I know that is slightly risky as the bank can invoke the "due on sale" clause, but I will be able to get a hold of the money if I need to, so I'm comfortable taking that risk. 

[Rivy S.]

Little update on this. I have decided to do the BRRR strategy on this. I delayed starting renovations on this because I closed on the property the day after I returned to work after the birth of our fourth child. I had too much going on, and the property was already tenanted, so I just let it ride for a few months. However, six months is coming up soon, and I'd like to be able to cash out refi, so I'm hoping to start renovations in the next few weeks.

The tenants, who were on a month to month lease, left unexpectedly on June 1st.  I had thought they were going to be here until July 1st, so I'm scrambling a little to get renovations going as soon as possible. I got two quotes for renovations, and I'm going to go with Finishing Touches.

The renovations are going to cost ~30k, and include a new roof, upgraded electrical system, adding a shower to the master powder room (which requires some reconfiguration to the room next door), new counters, paint, flooring throughout.   

My hope is that it will appraise for about 135. I will be all in for hopefully around 100k, and should be able to get a loan for about 95k. So not a perfect BRRR, but aiming to get as close as possible. It will hopefully rent for around 1300/month.

This is my first rehab, so if anyone wants to contribute any tips or advice, I'm all ears!