Thought FL was warm? BRRR, it's chillier than you thought :)

[Erica Osborn]

Investment Info:

Single-family residence buy & hold investment in Pensacola.

Purchase price: $62,000
Cash invested: $16,000

This was a BRRR! 3/2 simple house with simple systems. I bought the house from a wholesaler, the current owner was allowed to stay in the prop for 1 month. When she moved out, I rehabbed the property including new primer and paint throughout (previous smoker lived here), tile throughout, and a whole house rewire. I placed a commercial loan 6/1 on the property for 75% LTV, property appraised at 99k. I was able to pull almost all of my money back out and this was a successful BRRR in my eyes!

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

I was looking to add to my portfolio, rather than do another flip and this property was in my target zip code. It is a really strong rental area, the house is simple 3/2, and the lot is excellent.

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

I called a wholesalers I BUY HOUSES sign in order to get on their buyers list. I ended up having a great call with the first female wholesaler I had come across. We made plans to connect for coffee when I got back from a vacation I was going on. She emailed this to me while I was on my way back from vacation and I analyzed it and saw it that next day. I ran my number after seeing it, made my offer, justifying my number and she agreed. We made a deal!

How did you finance this deal?

All cash, my cash.

How did you add value to the deal?

I acted as my own GC for the repairs. I negotiated prices for my reno budget to keep the project on budget. I made the appropriate repairs to increase the value of the property and the property in the way of growth that is happening whether anyone likes it or not, receiving the area appreciation for being in the right spot.

What was the outcome?

The outcome is a good property, in a strong rental area, giving off 200/m in cash flow.

Lessons learned? Challenges?

I should have had my end financing in place before beginning! Most commercial lenders have minimums around 70k-75k, this took a lot of lenders out of the running for my project.

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

For this project I would recommend, Cooper Electric, LLC in Pensacola, FL; Patti Clarke with Summit Bank in the panhandle (they provided my financing on the back end); Realty Masters of Northwest FL (Property management)!