Our first BRRRR. No better way to learn than by doing!

[Bob Langworthy]

Investment Info:

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

Purchase price: $95,000
Cash invested: $35,000

We closed on this vacant duplex on the last day of 2019. Needs a significant amount of work (budget of $35k) as it was never rented out to anyone except family (who will put up with a lot more than a regular tenant). It will be our first foray into residential as our first investment was an office building. So much to learn!

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

We're familiar with renting office space and are comfortable in buying more office buildings, but everybody needs a bed, not everybody needs an office.

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

We found it on the MLS 9 months ago, but when we ran numbers on it they didn't make sense for us. The listing was pulled and when it was listed again 6 months later it was closer to what we needed. After we got it under contract, however, the inspection revealed some concerns with the foundation. We negotiated a reduction based on that and closed a couple weeks later.

How did you finance this deal?

We're financing it with a HELOC and will look to refinance it (possibly a cash out refi), once we've finished renovating it and have it rented.

How did you add value to the deal?

The house is mostly untouched for the last 70 years with the exception of vinyl siding, vinyl replacement windows, electric service, and slightly refreshed bathrooms. We'll add LED ceiling light fixtures with light switches (currently all pull strings), new kitchen cabinets and countertops, one laundry area for the two units, update the bathrooms, paint, carpet, and refinishing of some wood floors. In the spring we'll have the metal roof painted and will probably tear down the shed.