First BRRRR- Rowan University, New Jersey

[Jerry DiJoseph]

Hi everyone I wanted to share my first BRRRR. Location is in Glassboro, NJ, a few minutes off the campus of Rowan University. I chose this location because Rowan University has been expanding rapidly over the past 5-10 years and off-campus student housing is always in demand. I bought the bank owned property cash using a line of credit and put $32,000 into the remodel, including adding a half bath. I then did a cash-out refinance and got the place rented at $1600/month, producing $400/month in cash flow. The whole process took about 7 months, with the majority being the 6 month seasoning period before I could refinance. See details below.

Asking price: $99,900
Accepted offer: $87,500
Rehab costs: $32,000

Total investment: $119,500

After-repair Appraisal value: $172,500
Amount borrowed: $125,000

Mortgage+Taxes+Insurance: $1198/month

Current lease: $1600/month
Cash Flow: $400/month

BEFORE REMODEL:

AFTER REMODEL:

A couple notes:

-The property was originally listed at $110,000 when I made my first offer. I offered $87,500 and my initial offer was denied. There was no counter offer or anything (makes sense since it was bank-owned). The property sat for another month or so and they lowered the asking price to $99,900, to which I resubmitted the same offer of $87,500, and they accepted. 

-I have a construction company in my family, which helped me keep my rehab costs way down (My initial rehab estimate was less- but I found out after settlement that I had to replace a large part of the plumbing in the house). I basically got the work done at near-cost, which is a definite competitive advantage that influenced my numbers.