FIRST BRRRR PROPERTY! COME JOIN THE RIDE!

[Kevin Moules]

Hello BP members! I wanted to share with you my latest RE project. This is our 3rd RE transaction since jumping into RE in December of last year. First deal was a buy and hold 4 plex, then a flip which we are listing this week, and last month we purchased this SFH. It is a 1/1 home with 480 sq. ft.

I found this house through my daily Redfin emails. Home was listed for 50k with only a picture of the front of the home.I have learned when there is no interior pics it usually means its in bad shape. Since this was such a low price I knew it would not last. Its located in a C area but my initial thought was to turn this into a short term rental. 

We put an all cash offer of 56 with no contingencies and 500 earnest money. The worst that could happen is backing out and losing the 500 since I had no contingencies to negotiate with the seller. I asked my agent what he thought this place may go for fixed up and he mentioned 80-100K so it was too good to pass up. Just coming to the end of our first flip on a 1400 sq ft home I figured a complete rehab on a place this small would be 15K max with me doing a lot of the work. Ended up having two of us getting countered but we came out on top due to response rate to seller agent and we opened escrow. I drove to the property several days later and crawled under and over it. Everything looked good, and good bones! A lot of mice/rat activity in the home as well. Needed complete remodel on the inside though. Closed on it April 12.

The house sits on a 6750 sq ft lot! It is huge. Could fit another house on the property. Previous tenants turned it into a farming/greenhouse/animal raising operation. Went down last week for 3 days and raised hell with the place. In 12 hours I had the inside completely demoed and ready to start the rehab process. I started washing walls with TSP to get ready for primer and paint on day 2. Day 3 I hired 4 guys from Home Depot parking lot to help clean up the back yard. I hauled off 5 large dump trailers of garbage to the dump. There is most like still 1 trailer left of trash buried in the back yard. Pretty crazy.

Goal for this house is to use the BRRRR method, I may not get all my money back out and that's ok for me. Even if 10K stays in the deal I got a house for 10K out of pocket that's all fixed up. Rent should be between 700-800 when complete. I had 3 people stop and ask if it was for rent while I was working on it so I know people are looking. Since this is a rougher area in town I don't want to hold forever, plan is to hold for 2 years and 1031 into something bigger. Also, the lot is huge, its zoned R1 but I plan on reaching out to the city to see if they would allow it to be rezoned for multi. Contractor mentioned I should think about putting a small modular home in the back and double the rent if I can. Not a bad idea.

Anyways, check out the pictures and join me on my first BRRRR!

Listing Picture