First BRRRR On My Own

[Donald Cole]

Investment Info:

Single-family residence buy & hold investment in Indianapolis.

Purchase price: $18,000
Cash invested: $40,000

- Goal is to BRRRR.

- Purchased 2 bed, 1 bath property sight-unseen with an inherited "tenant" February 2019 for $18,000 cash.

- Tenant was actually the owners cousin who was not paying rent and actually heating the house by burning trash. Kicked the tenant out 2 weeks later with a mutual agreement and realized the floor was sinking in, oh no this is not good. But I planned to fully rehab the unit anyway.

- Rehabbed the property for $40,000 during spring '19. Converted the garage into a bedroom, added a bathroom to make the unit 3 bed, 2 bath.

- Rented it in August 2019 for $1,050 and a cash flow of $360.

- Appraised for 90,000. Was able to refi for 63,000 with a HELOC for future purchases. Pulling out all cash invested plus 3,000.

- Cash-on-cash return is now unlimited.

- Cap rate: 13.59%

- Cash flow includes rent payment minus HELOC interest only payment, taxes, insurance, maintenance and vacancy loss of 10% annually, and 8% property management.