BRRRR with 0% owner financing

[Samuel Garrett]

Investment Info:

Single-family residence buy & hold investment in Huntsville.

Purchase price: $100,000
Cash invested: $46,000

Another BRRRR deal with owner 0% financing in Huntsville.
Off market, 2 x SFH (3/3 & 2/1) package deal. Seller was firm with price ($100k). Properties were rent ready as previous leasee wasn't able to lock in financing. They did a lot of improvements on the home.

Rehab was small ($20k for both properties) and only took 3 weeks. Homes appraised for total of $145k.

Was able to negotiate 20% down with owner financing (0%) for 5 months. This allowed time to renovate, rent (now leased for combined $1800), build capital and will refinance in month 3/4 to pay the owner the balance owed and replenish capital used for renovation. Leaving $10k in the deal for a 70% CoC ROI.

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

Presented to my by my transaction agent that I closed on a previous deal. The location of the properties were in the path of progress in SE Huntsville. I also like that the rehab was less intensive compared to my other projects. Allowing me to get in/out quickly and rented.

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

There was another buyer who offered $10k less than asking. I agreed to the sellers asking with the agreement that I put down 20% and pay the remaining in 5 months with no interest.

How did you finance this deal?

Used LoC to fund the down payment and renovation. Owner financed the remaining for 5 months. Will refinance in month 3/4 to pay off loan and LoC.

How did you add value to the deal?

Location was/is great as there are developments in the immediate area. Location is central to main highway, big box stores, and development of giant mix use development in 2020.

What was the outcome?

Renovation completed on time (3 weeks). Both units are currently rented for $1800 combined. Will refinance in a few months to pay off debt owed.

Lessons learned? Challenges?

After completing a few deals. I learned that due to action and building a reputation, key players are willing and able to work with you, ensuring that the process

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

SVN realty (Paul McDonald) presented and negotiated this deal. He knew I was able to close and I was the first person he called cause I would be able to close quickly. Iberia Bank (Kristen Strickland) provided me the vote of confidence that I will be able to get a mortgage on this deal. We have completed deals in the past, so I am a returning customer with a track record.