SFH BRRRR Cashing Out Almost Everything

[Nick Macklin]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $65,000
Cash invested: $124,832

This was an off market deal brought to me by one of my agents. It wasn't stated by my agent but when I amortized what I thought their loan and interest rate were it was apparent to me that they were trying to walk away. It had some settlement issues but the sellers and my agent had already done the leg work for a quote on the rehab with a very reputable company. Before writing on it my contractor went and gave me rough numbers on the rest of the interior and exterior rehab.

Wrote the offer for $65k cash paying all closing costs and it was accepted. Total with rehab was anticipated to be $125k with an ARV of 160-180k. I decided to try my hand at delayed finance and paid cash for everything up front and escrowed any payments that weren't due to get the project started. Bottom line of settlement statement was $124,831.75. Rehab is finished and I just started to refinance. Appraisal came back at $173,500 and I'll be wrapping in as much of the closing costs as I can and taking a total loan of $130,125. I might leave about $500 in the deal but I'm expecting a cashflow of around $280 per month!

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

I like the repeatability of this type rehabbing this type of property so that I don't deplete the capital available to me.

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

An agent I was working with brought me a pocket deal and after I ran my own amortization of their current loan I realized they were just trying to get rid of the property more or less. I offered slightly higher than their loan balance and covered all closing costs. They accepted and we closed 3 weeks later.

How did you finance this deal?

All cash interest only loan from a family member at 5.5%

How did you add value to the deal?

The foundation needed to be leveled and the roof replaced. Painted all of the interior, replaced the floors, added new countertops, refinished the bathrooms and concrete needed to be fixed in the garage.