2 unit BRRR in Baltimore

[Austin Carroll]

Investment Info:

Small multi-family (2-4 units) buy & hold investment in Baltimore.

Purchase price: $104,000
Cash invested: $55,000

Bought this 2 unit property with cash that we raised for $104,000. The downstairs was rented for $900 a month and the upstairs needed a renovation. We put $40,000 into the second floor and rented it out for $1,050 per month and then moved the downstairs tenants out and rented that space for $1,150 per month including utilities.

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

This was an attractive investment because the home was laid out very well as a huge 3 bed 2 bath unit and 2 bed 1 bath unit with plenty of space in each. The downstairs was rented and provided cashflow while we renovated the upstairs. Finally we fixed the first floor up and were able to increase the rents. I like where this property is and am excited for the future prospects of it.

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

This deal was on the MLS, we negotiated it pretty heavily after another deal fell through.

How did you finance this deal?

Cash that was raised privately (not hard money), and then cash out refinance at 75% LTV.

How did you add value to the deal?

We added value through construction and tenant placement on this deal.

What was the outcome?

The outcome is that we have minimal cash into a deal that is a fully renovated home.

Lessons learned? Challenges?

Biggest lesson learned was moving out our bottom tenant. It was set up as two separate leases, one for each room. It was challenging to get the people out, and we were probably a little bit too lenient with letting them stay there longer than we originally wanted them to.

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

I was the agent on the deal, but Ken White and Revere Bank did a great job on the refinance.