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Updated almost 6 years ago on .

User Stats

45
Posts
24
Votes
Evan Dobrowski
  • Rental Property Investor
  • Auburn, WA
24
Votes |
45
Posts

Second Property - BRRRR strategy used the hard way

Evan Dobrowski
  • Rental Property Investor
  • Auburn, WA
Posted

Investment Info:

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

Purchase price: $81,000
Cash invested: $116,000

Second property purchased using cash and HELOC from previous property. This was a foreclosure that needed serious repairs. Total purchase price was $81K, total repair costs were $35K, ARV is $395K. This property has two residences on one lot along with a large shop building which is rented to one of the tenants. Great cashflow and when I find my next deal plenty of equity to pull from.

I call this our BRRRR strategy property done the hard way because we did the repair work mainly ourselves.

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

The property had good bones, had been on the market for over a year as a foreclosure, and I saw major potential.

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

Found on the MLS foreclosure listings, negotiated using a local realtor

How did you finance this deal?

Finances with personal cash and HELOC from previous property.

How did you add value to the deal?

Completely gutted one house and did a full remodel on the basement of the other house. Upgraded electrical using an electrician and general updating. Along with clearing an acre of blackberries by hand...ugh

What was the outcome?

Two years of life spent every weekend working on this property, great rental with fantastic cash flow, will be selling for huge gain or pulling equity out.

Lessons learned? Challenges?

I learned this is not the right way to invest in real estate. Don't get me wrong, it was a great find and a great purchase with a gorgeous outcome, however, I want to turn quick BRRRR projects using skilled contractors. Spending my weekends for two years away from family was a mistake and something I will not repeat.
Good news is this was the project that created enough capital for me to continue with my investments.

  • Evan Dobrowski