First BRRRR Was A Success!

[Zak Parks]

Hey BP! About 9 months ago, I found this site thanks to my friend who is now my business partner. Since then, we've managed to acquire 15 units with more in sight! I've always enjoyed reading BRRRR success stories the most, so now I want to share my own.

Background: I'm a 22 year old software developer living in Greenville, SC with about $50,000 in student loan debt. I debated on whether or not I should include that last part, but I know a lot of young folks get discouraged by their student loans and allow it to be the reason they stay on the sidelines. Get in the game anyway!

Tl;dr -- a free triplex + 55k + 350/mo cash flow (lol this would've been my click bait title).

The Summary:

Purchase: $37,000

Interest owed: $1,850

Rehab/fees & expenses: $13,190

ARV(via bank appraisal): $110,000

Cash out(refi): $77,000

Refinance closing costs: $3,247

Cash profit: $21,712

Net worth gain: $54,712

Cash flow: $350/mo

The property: Triplex on the MLS in upstate South Carolina. Listed at $39,000. It had come all the way down from $70,000 thanks to a poorly displayed listing and work needed on the property.

The price: I offered $35,000 and we settled on $37,000 with me paying closing costs(this was 6 months ago). I used investor money at 10% with a one year note and no monthly payments.

The previous condition: Mostly rotten floors needed to be replaced. The foundation also needed some more support and the rest was mostly paint and TLC. There was one unit paying $350/mo and another unit not paying at all. The last unit was empty.

The current rents: The bad tenant was removed and we had their unit rehabbed. That unit was filled for $495/mo, the empty unit was filled for $500/mo, and the inherited good tenant had their rent bumped to $400/mo. The property now grosses $1,395/mo. 

The refinance: the appraisal just came back last week at $110,000. We chose to keep those profits tax deferred by refinancing at 70% LTV over 30 years.

The cash flow:

After this loan payment, I expect to cash flow $300 conservatively or $400 optimistically. 

I never would've expected my first investment purchase to turn out this way and I owe most of the credit to you guys and these forums that hours and hours were spent browsing. Please let me know if I missed anything important. Thanks for reading BP!