Another BRRRR, Another "Free" Property

[Blake Edwards]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $55,000
Cash invested: $40,000

We found this one from a Wholesaler in the area and we jumped on it. Older individual owned it and let it go. We put in new flooring, paint, updated bathrooms, tore down the detached garage and installed a new carport.

St. Louis MO

Purchase Price - $55k

Rehab - $40k

Closing Costs (Including down payment) - $13,131

Appraised - $145k

All In - $95k

Rent - $1200

Refinanced and pulled out $13,200

Cash out of Pocket - $0

Cash Flow - $295/month

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

We are after buy and holds and this one cash flows in a great neighborhood.

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

We found it by calling a bandit sign on the side of the road and they told us they had this and didn't have time for it, so they gave us the address, we went by there and put an offer in an hour later.

How did you finance this deal?

Traditional bank financing with a rehab loan to start

How did you add value to the deal?

We put in new flooring, paint, updated the kitchen and bathrooms, spruced the place up, tore down the garage and installed a carport

What was the outcome?

We ended up with no money out of pocket and are cash flowing close to $300/month

Lessons learned? Challenges?

The actual rehab will ALWAYS be higher than the budget. Even if you set aside $4,568 extra for contingencies, you WILL spend $4,569.