Western Maryland BRRRR

[Benjamin Seibert]

Investment Info:

Duplex in Hagerstown, MD

Purchase price: $91,150
Cash invested: $17,000 (plus closing costs on the acquisition and refinance)

Contributors:

BRRRR in Hagerstown, MD. It is a duplex with units of 4 BR 2 BA and 3 BR 1 BA. Purchased this and performed $17k in rehab and currently have both sides rented out for a total of $2050 per month ($1100 and $950 respectively).

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

Limited initial capital makes the BRRRR strategy the most accessible for me.Since I'm just starting out in the professional world (being only 24) I need to be able to recycle capital until I make enough to continuously fund deals.

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

I found this deal on Hubzu and bought it from the online auction.

How did you finance this deal?

I used a commercial loan from a local bank (Summit Community Bank).

How did you add value to the deal?

My property manager performed the rehab on the property to refinish floors, install new flooring in the kitchen and laundry room, paint throughout, mold remediation and fix the furnace. I also removed unnecessary trees on the property and cleaned up brush and other shrubbery.

What was the outcome?

Repairs took longer than expected but luckily one of the units was rentable from the start, so I had rental income from the beginning. I am finishing up the refinance right now and it appraised for $150,000.

Lessons learned? Challenges?

I had a large tree fall down at the back of the property midway through last year. I didn't realize this was on my property initially as the property stretches so far back so the removal of the tree added unexpected costs. Also, it is good to formally lay out contractor expectations from the beginning (in writing). I didn't lay them out thoroughly enough and was at his mercy at times. A formal agreement on terms is important when dealing with a substantial amount of work.

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

Jim Rodgers from Summit Bank was a great asset in acquiring the property. @Alex Bekeza has been great to work with on refinancing - I definitely recommend him.