Our Second BRRR and the Miscommunication that cost us some money

[Josh Kredit-Phelps]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $63,000
Cash invested: $22,000

Contributors:
Daren D Wagner

BRRR property.
Miscommunication with Property Management delayed rehab. Carried the property until December before rent. Purchased at end of august 2018.

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

Rent to Value Ratios were very solid. Solid area for potential appreciation.

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

MLS
Negotiated final purchase price using inspection as proof of work needed and estimations for the fixes.

How did you finance this deal?

Chase bank. Cashed in on 70,000 bonus points. Using those to pay for lodging at my wedding in Hawaii this year.

How did you add value to the deal?

We did a light rehab. Painting and carpet cleaning. Original appraisal came back at purchase value which was disappointing as many properties sharing similar SQ FT and Bed/Bath were 20-30% more.

What was the outcome?

Still a profitable deal. Total Rehab money originally put in was under 5k.
We will need new carpet on the property turn and will hopefully see an increase in rents as we plan on putting more work in at the turn to move the rent cycle from the middle of the winter to early spring.

Lessons learned? Challenges?

1. Our realtor was not a good realtor for an investor. He didn't understand the process and what was actually needed for the property to be turned to be rent ready. Stated that the property was ready for rent ASAP.
2. We were not on the page with our property management company. They thought they would be picking up a property ready for rent ASAP. We had expected them to rehab and put in necessary make ready updates. This delayed us 45 days before we could put it on the market.

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

We have since moved to another realtor. We also are still up in the air on the property management company. However, with the issue they were extremely professional and work very diligently to get the property up to market spec.