First deal in Rochester, NY using the BRRRR strategy!

[Shane W. Chapin]

Investment Info:

Single-family residence buy & hold investment in Rochester.

Purchase price: $63,000

This is a 3 Bed 2 bath ranch style home. I am using the BRRRR method with this property. We are currently rehabbing the property and hope to be rent ready by April 1st. I will update this deal once we shake out the refi to see how much, if any, capital I have to leave in the deal.

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

I was initially looking for a small multi-family unit when we came across this house. I loved the location, the price and the value add opportunity! We decided this was a great first investment and will give us a fantastic education.

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

My realtor had purchased a property right across the street and saw that this came on the market while we were looking at other properties. The house was listed for $74,900..they dropped to $69,900. I offered $60K, they countered at $64,500. Upon inspection, we found mold in the attic so I was able to then negotiate a $1500 seller credit!

How did you finance this deal?

I was able to do a portfolio loan with 20% down. I am funding the rehab out of pocket and will be able to refi the property in about 5 months to pull my cash out (BRRRR) and go on to the next property.

How did you add value to the deal?

We are fully gutting and remodeling both bathrooms and the kitchen. We found hardwood floors under the carpet so we're having those finished as well. We have removed paneling off the walls and will be painting all surfaces in the house. We are also replacing the current furnace.

What was the outcome?

I will update this once we have it rented and refinanced.

Lessons learned? Challenges?

Don't get tunnel vision when looking for a property. A good deal is a good deal and be ready too move on it when you find it. Accept the fact that you will not have all of the answers you think you need in order to make the deal happen. Stick to your guns in the negotiation process and trust your numbers.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

(lender) Matt Shermerhorn at CNB and (agent) Jason Johansen with Keller Williams.