BRRRR single family with before and after pics! Metro Detroit

[Keith Jourdan]

Picked up this house in Redford Mi on a bankruptcy deal for $58k. Redford is 15 min west of Detroit. Decent area where homes sell for ARV of around 80-150k depending on size/location. Redford is in the Livonia/Westland/Garden City/Dearborn Heights/Plymouth area.

3 bed 1 bath 1000 sqft bungalow (we added a full bath in basement.)

New roof , all new plumbing, new paint, new garage siding, new countertops, refinished hardwood flooring, new plugs/switches, updated bathroom and put new full bath in basement. New carpet/vinyl etc.

In total  $21,000 remodel.

Put it up for rent for $1,200 yesterday and have already a ton of calls. Will rent at this price no problem. Here is the zillow link https://www.zillow.com/homes/for_rent/Redford-MI/h...

As soon as I have a signed lease I will do a cash out refi at 70% LTV. Appraisal should come in around 105-110k.

Before and After pics:

[Egan Lohman]

@Keith Jourdan - Nicely done!

@Michael B. - Just wanted to chime in on your question:

"So you purchased for 58K and put 21K into rehab so your cost is at 79K. You'll refi at, let's call it 110K, 70% LTV. 70% of 110,000 is 77,000. So how do you get cash out when that's less than 79K? Or is it because the 21K is separate?"

Your numbers are all correct. He put 79k CASH into the project (plus closing/holding costs). He will refi at 70% LTV on the appraised value of 110k. That means the bank will cut him a check for 77k. Remember, he doesn't have an existing mortgage. He owns the house outright. He paid 79k for it :).

Once he re-finances, he will have a mortgage, but he will essentially only have the remaining 2k (79-77) of his own money in the house. That's the beauty of BRRRR.

He will own a property worth 110k, he will have 30% equity because he only owes 77k, and he put 2k as down payment!  Oh, and he now has significant residual cash flow from the rent!

Time for the last "R" which really should be two "R"s - Rinse and Repeat!