8 Plex in Fort Worth Texas, my first BRRRR

[Clay Gradis]

Investment Info:

Large multi-family (5+ units) buy & hold investment in Fort Worth.

Purchase price: $565,000
Cash invested: $280,000

8 Units, 2 beds, and 2 baths in each. This property needed a lot of work but will clean up nicely.

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

I was looking for multi-family to invest in when this showed up on a wholesalers list. It was a repo which had been poorly rehabbed and then populated to prepare it for sale.

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

Wholesalers list, I worked directly with the wholesaler throughout the process.

How did you finance this deal?

I financed with a Hard Money loan. Included with the loan were funds to rehab the property. The lender has been a pain in the butt to work with to get the funds released. I will never do this type of loan again. I'll take a loan to purchase but not a rehab loan were the lender has to verify work completed prior to paying out.

How did you add value to the deal?

I have rehabbed all eight units and am in the process of renting the units.

What was the outcome?

6 of the 8 units are now rented with a 7th looking like it will be rented this month.

Lessons learned? Challenges?

The rehab took a lot longer and cost a lot more than I expected. This process nearly ended my investing career.

[Clay Gradis]

One of the issues I faced is that the rehab on this property was far larger than I expected, I've dropped $100k into it so far and still need to replace the 4 roofs at a cost of ~$70k.  In the future, I will be buying newer properties or properties in better shape and no more flat roofs.  Check into the property you want to buy and know the rehab as well as possible prior to buying it.  Good luck.