Accidental $291k cashout refinance... Biggest BRRRR Deal yet!

[David Zheng]

Hi BP!

Just wanted to share one of the most exciting things that "accidentally" happened to me.

Back in Sept, 2016 I was just 9 months into real estate investing and I was browsing Zillow for fun as I usually do. Managed to catch a 3 unit, 3bed1bath/unit going for 260k in an area I like to invest it. Scheduled the showing within a minute and made an offer within an hour of seeing the listing at 230k! Had to go through an HML but it was a deal I couldn't pass up. Closed on Oct, 2016 with a 11% 12 month interest only loan with 80k down (ick!)

Skipped Thanksgiving, Christmas, New Years, and my birthday and went through consistent 80-90 hour work weeks (I have a full time too) and probably 5000 headaches and screaming sessions to get the whole thing rehabbed and ready by the end of January, 2017. Also added a bedroom to make it 4b1b units.

Here are some numbers:

Purchase- 230,000
Rehab- 115,000
Closing/Holding Costs- 17,900

=$362,900
Actual cash invested - $109,900
Existing Debt Obligation- $253,000

I'm renting it out for 2700/unit or 8100/month total

Now I thought this thing was going to appraise for 400-500k originally. Silly me not knowing anything apparently...

Because the Appraisal came back at a whopping $680,000!!!! and the bank is willing to loan up to 80%!!
When I got the phone call, I was in shock because that essentially puts me at pulling $544,000 in straight cash and netting $291,000 after I pay off the HML!
After this refinance, I should still be cashflowing at least $2,000 a month after PITI and expenses too!

Gonna show my soft side and admit I cried like a baby because I started to reminisce on all the sacrifices and pain I went through with this building. It really has been one of the most rewarding moments of my 26 years of life and as an Asian with high expectation parents, I was glad I had something to prove my worth to them.

So what now? Downpayment on a 1.5 million dream beach house I've always wanted? A Lambo because I adore those cars? Quit my job? Go on vacation at least?
nope.

 I already had my eyes set on another apartment building and will be throwing my money there as well as another primary since I just rented out mine recently.

Just wanted to share this wall of post in the hopes of finding like minded investors, inspiring others, and as a big thank you to the BP Family for everything!

Best Community ever :)

[Jay Hinrichs]

and there are no deals on MLS ????? good job keep it up.. remember that cash out is tax DEFFERRED NOT tax free... but either way you have some nice powder to go do something else.

I know your probably kidding about the car..

Also not sure if you thought of this.. but what about no taking so much out and using the cash flow to pay it off quick so you have it completely paid for that's a nice asset to have paid for.

the most successful dudes and dudettes I know in RE have a ton of free and clear property not a bunch of leveraged to the hilt props.. I know my thought process is probably very much in the minority.. but just something to think about.