Successful BRRRR Strategy!

[Justin Dias]

Investment Info:

Small multi-family (2-4 units) buy & hold investment in Three Rivers.

Purchase price: $71,375
Cash invested: $162,450

Purchased this property (along with another) using the BRRRR strategy. We took out a HELOC on a 5-family, which allowed us to buy this property "cash" and completely rehab it. Purchase Price = $72,000 Rehab = $90,450 ROI = 13.94%. Currently we're in the process of securing a business line of credit with this property (and another one) and use those funds to possibly scale up into large multi-families.

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

This was a very distressed 2-family in a nice area (actually right down the street from another rehab we did). We ran the numbers and had enough of our HELOC left over to make a cash offer and rehab the building to be completely rent ready.

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

We actually found it through the MLS. It was bank owned and we acted quick with our cash offer in "as-is" condition.

How did you finance this deal?

We financed this deal by taking out a Home Equity Line of Credit on a 5-family we owned free and clear.

How did you add value to the deal?

We completely gutted both units, in some cases right down to the studs, and completely renovated it with new kitchens, baths, flooring etc.

What was the outcome?

We worked with an amazing contractor Beauregard Building & Remodeling, who came in on time and on budget! So we worked on the rehab right through the winter and had it up for rent in the spring. Currently rented by two great families and cash flowing nicely!

Lessons learned? Challenges?

We learned the value of hiring a good general contractor. We can't say enough about Beauregard Building & Remodeling, he was very nice, receptive to our ideas, honest and transparent with all aspects of the job. This relationship allowed us to get this building rehabbed and rented according to plan! (which is very rare...)