First BRRRR in Upstate NY

[Elizabeth Harding]

Investment Info:

Single-family residence buy & hold investment in Rotterdam.

Purchase price: $69,000
Cash invested: $55,000

My husband and I have a couple of short term rentals, one in an in-law at our primary residence and one at our part-time out of state residence. This was our first attempt at BRRRR.

We bought a property that was a foreclosure that had been vacant for 4+ years. 3 bedroom, 1 bath about 1350 sq ft

We didn't get all the cash out but we are happy that we didn't completely bomb our first project!

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

We run a software business and we are looking to diversify by moving into real estate. It was attractive to us because of the reasonable entry price. We chose a long established middle class neighborhood in a good school district.

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

We found it on HUD Homestore and used an agent for negotiations.

How did you finance this deal?

Cash purchase and cash renovations

How did you add value to the deal?

We chose to do a really thorough renovation. We wanted everything to be new so that we could get a higher rent than other places in the area. We wanted to find tenants that would value the beauty of the house and be willing to pay more for a nicer home.

What was the outcome?

We bought it for $69,000 cash
Between renovation and other expenses we spent about $55,000 cash
We were able to do a cash out refi for $105,000 and we are renting it for $1650/mo
The ARV is around 155k but we took out what we could based on a healthy debt coverage ratio

Lessons learned? Challenges?

We ended up renting it in the summer and it was right after major landlord tenant law changes. I was scrambling to find a lawyer to help draw up a lease because they were all really busy. I should have started that process earlier.

We spent more time trying to find a good contractor and getting it renovated than we probably should have but it was a great learning experience.

We got set up with the Pro desk at Lowe's so we got the discounts on appliances and other materials.