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Updated almost 6 years ago, 03/04/2019
I completed my first BRRRR!! Long distance, and while pregnant.
Investment Info:
Single-family residence buy & hold investment in Odessa.
Purchase price: $41,000
Cash invested: $104,088
This is my first BRRRR, which is also long-distance and while I was pregnant! Just to make things even more interesting, it was completely gutted down to the studs and came with a squatter that had to be forcefully removed by the police (via shattering a glass patio door). Talk about jumping in feet first! :) While I did leave $30k in the home after the re-fi, it would be almost impossible to find a house this nice for that much and still cash-flow $600+/month. So overall I gave myself a B+.
What made you interested in investing in this type of deal?
I had been wanting to try the BRRRR method for about a year since hearing it on the podcasts and this home projected very good numbers on the BRRRR calculators.
How did you find this deal and how did you negotiate it?
I bought it off Auction.com, so there was no negotiating.
How did you finance this deal?
CASH (my own)
How did you add value to the deal?
Completely renovated it, inside and out. Aside from (only some) of the framing, the entire house is new.
What was the outcome?
I re-financed it for $112,500 (after spending $145,000 in total) and then rented it out for $1795/month (my holding costs are a little over $1100 including PITI plus capEx/vacancy/repair funds etc). Plus- I rented it under-market because I was so motivated to get it rented, so I had 3 applications in just a few days. Next year I will raise the rent another $100/month.
Lessons learned? Challenges?
Gosh where to start? One- I will now ask someone local to go by and peek in the windows for me before I offer OR if I can't do that, I will plan financially for a FULL gut. I planned for a cosmetic rehab and ended up practically building a new house. Second, I will know someone local who can help me BEFORE I decide to go into a new market. Thirdly, I would recommend reading David Greene's book on long distance investing before you invest long-distance! I worked backwards on this one. :)
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
I used FirstUnited for my re-fi who was great and I did not use a local agent but do plan to on my next deal in this market!