BRRRR'd 1st property - not a home run, but still good!

[Joseph Firmin]

Investment Info:

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

Purchase price: $100,000
Cash invested: $76,000

Learned a lot from this experience... Even after reading Long Distance Real Estate Investing and many other posts, blogs and advice from the BP community, I still managed to make some bone head moves as far as the contractor goes. I bought for $100,000, invested another $50,000 into the renovations ($20K more than calculated) and am renting it out for $995/side currently. Went through 3 contractors, didn't go as planned, but still a good investment long term.

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

I wanted something more than a SFH and a duplex seemed like a good place to start. I liked the area and I think it will be growing faster given new jobs coming in over the next few years.

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

MLS. Offered on it without seeing it, locked it up and then received seller concessions at closing for certain items.

How did you finance this deal?

Conventional mortgage loan, 25% down.

How did you add value to the deal?

Completely renovated the interior and some of the exterior.

What was the outcome?

Renting each side for $995/mo. Cash flow after all reserve accounts met and PM paid - $750/mo.

Lessons learned? Challenges?

Lots. I had 2 contractors quit on this job, both due to divorce. That made this renovation about 3 months longer than it needed to be.
1. Get contractor bids, examples of work
2. Get contract in writing with contractor
3. Include in contract a penalty for late work and bonus for early
4. Small multifamily properties require 25% down for a conventional loan
5. Just because your PM recommends a contractor, doesn't mean that you should not get it all in writing and include a penalty/bonus.

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

Adam's Painting & Repairs - my final contractor was the best and the quickest. He came highly recommended and worked quickly. His 50% down / 50% at completion wasn't great, but it worked well.