A perfect BRRR with no money down!

[Martin Lindsay]

Investment Info:

Single-family residence buy & hold investment in Kannapolis.

Purchase price: $88,000

A perfect no money down BRRR!!

This was my first deal and definitely solidified my love for real estate investing! It also allowed me to fully understand the power of providing value and building relationships.

Buy - $88,000
Rehab - $700
Refinanced - $93,000
Rent - $1200

Cashflow - $300/mo

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

I knew the property was a good deal and under market value in its current condition, and the wholesaler wanted $88,000 for it.
It was a 2009 manufactured home on a permanent foundation in excellent condition.

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

My lender and I both wanted to get the property appraised to that we knew it would work out for us, but obviously I didn't want to put down an EMD without knowing if the deal would even work. To demonstrate value while asking for value in return, I told the wholesaler I would pay them their full asking price if they let me get the property appraised first.

A bit of hustle later, I got it appraised the NEXT MORNING and the report came back that evening and it appraised at 124,000.

How did you finance this deal?

I networked with a colleague off of the BP forums, who ended up being my private lender on this deal. They funded 80% LTV, roughly ~70k, and I was to come up with the 20%. I had some cash and a HELOC on my personal property, but I also had a close friend who had been wanting to passively invest to get better returns than his savings account, and I knew the deal was sound enough. He loaned me the 20% that I needed, which allowed me to use my funds on another project simultaneously.

How did you add value to the deal?

Very minor cosmetic repairs. The property had a lot of built in equity already being well under market value.

What was the outcome?

I refinanced at 75% LTV which was roughly 93k for the new loan, which covered the payoff for my lender, his interest and points, as well as my friend along with his interest too.

Now I have a property cash flowing a little over $300 a month and about 30K in equity.

Lessons learned? Challenges?

This one went as smooth as possible for the most part, so not too many big lessons learned just a better understanding of the business and the process.

However the challenges were all centered around financing. Manufactured homes are difficult to finance especially as a full time investor who no longer has W2 income. Even most hard money lenders with rental loans won't touch manufactured homes.

[Chris Rosenberg]

@Martin Lindsay Hey Martin. Glad to see your first deal went well. I’m looking at a very similar deal but am having a hard time finding a lender to finance/refinance a manufactured home on a permanent foundation. What lender did you use for the refinance? Did you refinance it as an investment property? Thanks.