First BRRR investment property! :)

[Alex Smith]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $25,000
Cash invested: $70,000

Contributors:
Dawn Curry

Bought this one from a wholesaler for $25,000 as a 2 bed/1 bath with an unfinished attached garage area. Spent about $40,000 in rehab and converted it into a 4 bed/1.5 bath that is now rented for $1,500/month. Will be completing a cash out refinance in December to pull out $70,000. After the refinance, it will still cash-flow about $500/month with $0 stuck in the deal. This is our first BRRR and definitely not our last. Our tenant is hoping to buy the property for $140,000 in a few years.

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

My realtor is also a wholesaler and he came across the deal from one of his wholesaler buddies.

How did you finance this deal?

One of our other investment properties caught on fire earlier this year. When rehabbing it, we did all the work ourselves, which left a lot of insurance money leftover. We used the rest of that money plus a little money from our Business Line of Credit to finance this deal.

How did you add value to the deal?

Converted it from a 2 bed/1 bath to a 4 bed/1.5 bath, which allowed us to rent it for $400-$500 more than we could have originally.

What was the outcome?

We have a great tenant-she LOVES the property and takes pride in it. She actually came to help us with finishing touches during the end of the renovation. She is great with painting and re-painted all of the cabinets to match her furniture. She is working towards fixing her credit after her recent divorce and plans to purchase the house for around $140,000 when she can get approved for a mortgage.