First ever BRRRR - Refinanced and got the property for "free"

[Blake Edwards]

Investment Info:

Single-family residence buy & hold investment in Florissant.

Purchase price: $72,000
Cash invested: $15,420
Sale price: $70,000

Bought for $72k
Closing Costs $14,300
Rehab Cost $16,100
Appraised for $121,000
Loan Amount $ 86,300
Rent $1300
Cash Flow $372.72
Refi'd and pulled $15,420 back out.

What made you interested in investing in this type of deal?

We wanted to be able to pull our initial investment out

How did you find this deal and how did you negotiate it?

I found it on MLS listed as coming soon. We knew it would go quick so we offered a bit above asking price and wrote a letter to the homeowners stating who we were and our intentions with the property.

How did you finance this deal?

We used traditional financing through a bank. A construction loan, and once the rehab was complete, converting the loan into a traditional 30 yr mortgage

How did you add value to the deal?

We updated the interior. New floors, paint, updated kitchen and bathrooms, as well as fixing stuck windows, stubborn doors, certain appliances.

What was the outcome?

We successfully closed, rehabbed, placed a renter, & refinanced. A tenant is now placed and we are cash flowing. Since we were able to refinance and recover our initial investment it's essentially like we acquired the property for free.

Lessons learned? Challenges?

This was our first one so there was a lot to learn. The correct people to talk to in order to get things done. The correct verbiage to use when speaking to people. How to communicate with the agent and indirectly with the homeowners who were selling. We had a hazy idea about the process, but once we were in it it became clear that this was repeatable. The biggest challenge for us was waiting. With so many parties involved in a real estate transaction, the waiting is the hardest part.