Our first Rental - a SFH BRRRR in Boise

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Our first Rental - a SFH BRRRR in Boise

Ryan Weimer
Rental Property Investor · Encinitas, CA · Member since 2018 · 56 posts · 33 votes

Investment Info:

Single-family residence buy & hold investment in Boise.

Purchase price: $205,000

Cash invested: $13,500

Our first BRRRR property in Boise! Occupied within 2 weeks with fantastic tenants!

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

Boise fundamentals and high potential for equity/appreciation growth with value add

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

on the MLS, was previously under contract but came back on for 24 hours after trace amount of mold was found, which spooked the original buyers

How did you finance this deal?

conventional, 20% down with a partner

How did you add value to the deal?

$13,500 in rehab. Mostly cosmetic with cost effective touches to the bathrooms and kitchen to improve aesthetics

What was the outcome?

30k+ immediate equity created, rented within 2 weeks of closing to high quality tenants

Lessons learned? Challenges?

Was rejected on quite a few offers before but was opportunistic and stuck to the process

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

Yes! Corby Goade with Boise Turnkey and Heather Eshelby with Cohesion Properties

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  • Matthew McNeil
    Rental Property Investor · Boise/Portland · Member since 2017 · 709 posts · 742 votes
    7y

    Congrats Ryan! 

    Pics look good.  Was your renovation work limited to the kitchen?

    Are you willing to share how much rent you were able to get with your new tenant and what will your cashflow be based on that rent?

    1Reply
  • Ryan Weimer
    OP
    Rental Property Investor · Encinitas, CA · Member since 2018 · 56 posts · 33 votes
    7y

    @Matthew McNeil it was not limited to the kitchen - for some reason the BP post limited me to 6 pictures.  I can send you more if you'd like to see!

    Rent is $1500 and cashflow estimated $30/month - keep in mind this was an equity play for us and we plan to HELOC this summer or next. We want to build equity first before transitioning to a cash flow model down the line.

    ARV is about $245-250k as of today so about ~30k equity netted in this deal.

    0Reply
  • Matthew McNeil
    Rental Property Investor · Boise/Portland · Member since 2017 · 709 posts · 742 votes
    7y

    OK, you put 20% down on a $205k house, which is $41,000 plus closing costs ($5000 estimate) plus $13,500 rehab. That totals $59,500. If we back out the closing costs, which you may have wrapped into the loan, then that's $54,500. If your cashflow is $30/month then your COC (simple calculation) on $1500 rent is 0.6%.

    Granted, I understand the equity play in the Boise market, but I think you could have done much better regarding cashflow with the less cash invested.  For example, I saw a house that just came on the market today for $220k.  With 20% down, no rehab, and rentable at $1500/month you would have cashflowed at $176 using a PM.

    You keep referring to the "equity netted", but you could have gained equity as well on another asset that cashflowed better.  I bought a house in Meridian two years ago for $206k with $400/month cashflow.  Today, its worth $286k.  

    I'm sure you learned a lot on this deal.  Hope you can use it as leverage to grow your portfolio.  Cheers!

    2Reply
  • Ryan Weimer
    OP
    Rental Property Investor · Encinitas, CA · Member since 2018 · 56 posts · 33 votes
    7y

    @Matthew McNeil appreciate your comments - I do have a lot to learn. I am investing in Boise for the appreciation by seeking value add opportunities to BRRRR, so a little different model. In 6 months we will be able to pull out a HELOC and recycle the cash to purchase the next one. In my early stages snowballing leverage to scale faster is more important than a couple hundred dollars a month cash flow. I don't believe Boise is the right market at this time if looking for cash flow, but it is a gold mine for flipping/appreciation plays.

    In your example of 220k with 20% down I am showing -$30 cashflow with same numbers, and also wouldn't have any equity to tap for a HELOC.

    Sounds like you have a keen eye for the details, which I very much appreciate.  Let's connect, would love to chat about future prospects and your experience.  I'm sure I could learn a lot!

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