30y/o, Married, 1 kid stay-home mom: BRRR 4PLEX W/Bank

[Jeryes Freih]

Investment Info:

Small multi-family (2-4 units) other investment in Wappingers Falls.

Purchase price: $330,000
Cash invested: $85,000

I am in contract to purchase a 4 family for 330,000 with a 10,000 seller concession that has 3 2bed/1bath units rented at 1300 a month and 1 1bed/1bath that needs to be gutted. There are some other exterior repairs needed as well. All in all it looks like I need about $25,000 in repairs. I believe the property after repairs will appraise at $425,000. I am trying to us the BRRR strategy through a bank as well. I have a bank that is going to give me 75% LTV on the 1st mortgage then after I make the repairs and reappraise the property they guaranteed me 80% CLTV on the 2nd mortgage. Hopefully I will be able to pull out $110,000 from the 2nd mortgage. The total rents will be $5,100 and can be increase to $5,500 over the next year. So all in all I will be able to pull out everything i put in and still cashflow $800 a month.

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

Being that this is my first deal and I do not have a lot of cash having a property where several units are rented and I can rehab the property while the rents are covering the expenses.

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

Found it on Realtor.com and I negotiated the price down from 385k because there were some minor exterior repairs needed and 1 apartment was vacant and trashed that needed to be fully rehabbed.

How did you finance this deal?

HELOC on primary residence used for down payment and rehab with bank financing.

How did you add value to the deal?

rehabbed the trashed studio into a 1 bedroom, made repairs to broken exterior staircases, coin operated laundry room, and fixing up the garage for extra income.

What was the outcome?

Still in process of closing. We shall see....

Lessons learned? Challenges?

Bank financing a rehab project via conforming mortgage is VERY TIME CONSUMING AND FRUSTRATING.

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

Mortgage originators from Hudson Heritage FCU and TD bank were both very good. Feel free to contact me for names.