1st BRRRR deal sold to tenants for 144% of cost

[Greg K.]

Investment Info:

Single-family residence buy & hold investment in Fitchburg.

Purchase price: $98,000
Cash invested: $1,500
Sale price: $155,000

2 bed, 1.5 bath condo built in 2004. Purchase price: $98k, closing costs: $2k, renovation costs: $7.5k. Total cost: $107.5k. Appraised at $141k (my pro forma was $130k so this was a nice surprise). One local bank offered 80% ARV while 9 others were at 75%. $110k mortgage, 5.25%, 30-year fixed. After closing costs, I walked away with a check for $106k leaving a $1.5k cash investment and $31k in equity. Purchased December 2018, sold May 2020 for $155k to my tenants.

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

I was looking for a low cost BRRRR for my first deal. This condo made it easy since it really just needed a cosmetic update. Plus the rental numbers worked really well. Cosmetic rehab (paint, carpet, appliances) which I did myself over Christmas vacation. Listed for rent 7 days after purchase. Rented for $1300 after 4 DOM.

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

HUDHomeStore.com. Purchases at 90% of list price.

How did you finance this deal?

HELOC on primary residence and credit cards for rehab.

How did you add value to the deal?

De-winterized, new paint, new appliances, new carpet.

What was the outcome?

Found great tenants who moved in February 2019 and purchase the home from me in May 2020.