First BRRRR - 3 bed 2 bath and 1 bed 1 bath

[Joe Edmonds]

Investment Info:

Small multi-family (2-4 units) buy & hold investment in Batavia.

Purchase price: $86,000
Cash invested: $50,000

First investment property. Had a great contractor who finished a huge rehab in about 2 months.

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

The book on rental properties (Brandon Turner). I rented my first house for 4 years after I moved into my second house and decided to reinvest to proceeds of the sale.

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

Through a real estate agent that I trust. He was willing to write offers that most agents would try to talk me out of. My plan was to write 10 offers before expecting one person to entertain it. Surprisingly our first offer already got a counter offer.

How did you finance this deal?

I was very fortunate on the sale of my home and was able to do this with cash.

How did you add value to the deal?

We changed the floor plan a little bit to make a master suite instead of a strange room that was there before. We turned a useless porch into a bedroom, and added a common bath in the center of the bottom unit. The upstairs unit we had to redo the shower because it was only about 5 feet tall. We also had to add additional support to the foundation, and added Granite counter tops through the house.

What was the outcome?

Barely went over budget with lots of surprises, value skyrocketed and both units rented relatively quickly.

Lessons learned? Challenges?

Permits are a huge pain. If you can avoid them, do so! You should never do work that wouldn't pass an inspection, but many cities are very hard to deal with and quite slow. Also, qualify the hell out of your tenants, plan to pass up on 4 or 5 to get to the right ones. It will be worth it.

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

My real estate agent is relatively new, but he's outstanding. My contractor I'm convinced is as good as they come.