Didn't quite cover my costs on this BRRR.

[Erich Henson]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $23,750
Cash invested: $50,000
Sale price: $85,000

Tried to BRRR this house but didn't quite cover all my costs after the refinance because the appraisal came in quite a bit lower than expected. So at the end of the day I have about $6000 out of pocket on this project. Rented for $1200/mo section 8 so it cash-flows nicely and I'll make back that $6000 in less than a year.

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

I thought I'd have no problem recouping all of my investment using the BRRR strategy but the appraiser didn't like the layout of this house and hit me hard for it.

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

This one was on the MLS. Offered about $1200 under offer price.

How did you finance this deal?

Using my 0% interest credit cards and HELOC and then doing a cash-out refinance to pay off the short-term debt.

How did you add value to the deal?

Replaced nearly all the plumbing and cosmetic updates.

What was the outcome?

Didn't recoup about $6k of my out-of-pocket but with a $1200/mo section 8 lease, I'll recoup that money within a year.

Lessons learned? Challenges?

Be more conservative with the estimated after rehab appraised value!