Bought a 3 family house to BRRRR

[Scott Wilson]

Investment Info:

Small multi-family (2-4 units) fix & flip investment in Jersey City.

Purchase price: $512,000
Cash invested: $210,000
Sale price: $1,650,000

Full gut renovation to turn a severely under-performing 3 family building into a cash cow.

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

I wanted to leverage my architectural license and education from NYU Schack to get into Real Estate development. A 3 family building was a great place to start with little money down.

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

I worked with a local agent who showed us several properties just before the Real Estate market started to pick up.

How did you finance this deal?

I got a 203 K loan and only had to put down 3%

How did you add value to the deal?

I took a 3 family building (each unit was 1bd / 1ba) that only had one tenant paying $900/mo rent, did a full gut renovation and transformed the building into 3 2bd / 1ba units making $7,500/mo. I then sold the building based on its new value.

What was the outcome?

I sold the building for a 230% return once the Jersey City market got hot.

Lessons learned? Challenges?

The construction took 1.5 years during which I had to pay the loan and construction loan as if I had drawn all the money. Dealing with the building department was a complete nightmare.

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

Highly recommend my agent - Peter Lee