First house hack and flip!

[Justin Greene]

Investment Info:

Single-family residence fix & flip investment in Cape Girardeau.

Purchase price: $84,500
Cash invested: $25,000
Sale price: $146,900

This was my first Realestate transaction. I was very happy with the success of this deal. I was able to house hack for the three years that I owned the house, renting out two rooms to cover the cost of the mortgage.

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

I knew that I wanted to buy a house as soon as I finished college - this house was in decent shape for being a foreclosure and I knew that I had people that would rent rooms from me to help cover the mortgage. I was thrilled to live for free and build a decent amount of equity at the same time.

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

I did this deal the traditional way - Realestate agent that found it for me.

How did you finance this deal?

This was traditionally financed through a local bank. I had a good W2 job, and very little debt. It made it extremely easy to finance.

How did you add value to the deal?

I did all of the work myself. I tore out carpet and exposed the hard wood floors upstairs. Complete remodel of the upstairs bathroom. Added one legal bedroom and a bathroom own stairs as well as finished the entire basement.

[Stephen Schott]

Hey Justin! The BRRRR Strategy is going to begin with you finding a lender that you can work with really well. I got started by raising money for my first deal all in private money. Then used that money to buy and rehab the first deal all cash. Then went to a bank after owning it for 6 months (kind of a cut off point for portfolio lenders, they prefer you own it a year) and opened a line of credit on that house. That line of credit is now used to purchase and rehab all our deals, then we finance the house to pay off the line of credit rinse and repeat. As long as the bank shows you making over 1.35 DCR (debt coverage ratio) they will be more thna happy to lend you money on buy and hold investments.