After Countless Hours Listening/Reading - 1st BRRRR Home Bought

[Brian Eilering]

I'm posting in RE Success Stories but I really only have the first part done.

Like many others around here, I had a hard time choosing what path of RE investing to go down. I ended up choosing the BRRRR strategy.

My next problem was location.  The area I live in Atlanta is HOT.  There are no 2% deals here in Metro Atlanta.  Hell, you'd be lucky to find a 1% deal.  Most homes rent for less than 1% of purchase price in our market.

As Brandon and Josh constantly say on the podcast, if you drive a couple hours from your home city, you will find a good opportunity.

We then focussed on some surrounding areas only to be less than excited about what we found and the prices remained higher than we were willing to pay.

As I started to slow the search down, we found an emerging market about 3 hours from our house...Augusta, Ga.  This little city is ready to grow.  Job growth is there along with city planning willing and able to accommodate the upcoming expansion.

Like other cities, Augusta has some good and bad areas.  We were lucky enough to find an older home in need of some work listed for $80K in one of the good areas.  We offered $57K and with a counter of $60K, we gladly accepted their terms.

The home, without repairs and before closing, appraised for $75K.  I already have $15K in equity without swinging a hammer!  After repairs, I anticipate the home to appraise in the $120-$140 range.

Here is the kicker, the home actually has a secondary home on the property we call the cottage.  We plan on turning the cottage into an Airbnb hoping to hit a HR during Masters Week in Augusta while having a permanent tenant in the main house.  I should be able to get 2% on the main house allowing the cottage to just be icing on the cake.  There are hospitals, an army base, a university, amongst other things helping support the Airbnb theory.

There is some work to be done on the home.  I know finding contractors can be a task.  Any suggestions on finding contractors would be great!  

I really appreciate the podcast and countless articles/blogs/forums on the site. Without all of the great ideas, I would be nowhere closer to passive income and financial freedom! My wife and are quite excited and just about ready to start shopping for investment home #2 and rounding out the last R in the BRRRR strategy!

Thanks again

[Brian Eilering]

Before I start, I have not figured out how to @ (mention) someone, I'll take some instruction for that part as well...

Thank you Chris for the suggestions on finding contractors.  I think those are some great ideas.  I will definitely reach out to some of the other BP investors in the area and see if they have a suggestion or two.  

Joseph,

I am actually applying my commission from the sale to the closing on the home.  My cash to close is essentially $1800 less than it normally would be.

As for repairs, most of the house is in reasonable shape.  I will need to redo two baths in the main house and the kitchen in the main house as well.  The floors and walls are in pretty good shape.  I intend to refinish the floors and repair a little drywall.  All in all, I hope to get all repairs on the main house done with about $20K...hopefully less.

The cottage needs more repairs but of course it considerably smaller.  Maybe another $10K on that house.  

I should be all in at $90K and have an ARV hopefully closer to the $140 mark...could be higher. A house a couple doors down is on the market for over $200.

Thanks for all the feedback, it is much appreciated!