My 1st BRRRR rehab update

[Meredith Mihm]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $15,600

This is our first BRRRR. 4bd, 1ba. New siding and windows. Closed on February 22, and since then, have converted oil boiler to LP, and totally gutted the house. Hoping to spend between 30-40K, but just learned that we will need a new roof... we are doing most of the work ourselves, so we will hopefully come in close to that. We plan to rent it for $1000ish/mo. Nice big rooms, nice lot, should appraise for $100K, probably more.

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

At a purchase price of 15K, there is a lot of room for error. We thought this would be the perfect first investment for us. We are doing most of the work ourselves, so that we can learn how to estimate rehab costs in the future, timelines, etc.

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

On the MLS. We went through the seller's agent, and he accepted our first offer. Asking was 39K, and we offered 15,600.

How did you finance this deal?

We paid cash. We are using savings to pay for the rehab, and will probably need to dip into our HELOC. We were originally planning to cash out refinance, but I like the cash flow that will come from owning it outright, and our debt to income ratio will certainly look better for future deals without a refi on this one...

How did you add value to the deal?

We are doing EVERYTHING all new, including a much larger kitchen and an added bathroom. All new electrical, all new drywall, lighting, the whole deal.

What was the outcome?

TBA

Lessons learned? Challenges?

So far, so good.

[Meredith Mihm]

It's in Fountain City, WI. Just across the Mississippi river from where we live in Minnesota...