An Out Of State BRRRRfect deal!

[Gorden Lopes]

Investment Info:

Single-family residence buy & hold investment in Huntsville.

Purchase price: $70,000
Cash invested: $36,000

My second BRRRR deal, bought it for 70K, rehabbed it in 36K and got it rented for $1200 and then it got appraised for 150K. Getting all my cash out!
Had posted a BP post while I was in the process of rehab, read it as well to get more context.
https://www.biggerpockets.com/forums/597/topics/810809-my-current-brrrr-deal-in-progress-and-need-contractor-references?highlight_post=4839430&page=1#p4839430

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

There was enough meat on the bone that even in worst case I would be NOT loosing money on this and I will learn a ton about rehab as this involved a lot of rehab!

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

Found this through a wholesaler, I started by offering 64K and after almost a 1.5 months of negotiation we decided on 70K. This house also had a bonus room which helped with renting it out quicker.

How did you finance this deal?

I paid all cash and in the process of doing a cash out refi.

How did you add value to the deal?

Did a complete gut rehab of the master bathroom down to the replacement of the subfloor, did a kitchen rehab by repainting the cabinets, adding new countertop, new backslpash and new appliances, new fixtures, repainted the entire house, added new floor to the basement living area.

What was the outcome?

I was able to get it rented out even before the rehab was finished and the tenant moved in the next day after the rehab was completed. Currently doing cash out refi and it got appraised for 150K so hoping to get all my cash out and this should cash flow 250 conservatively.

Lessons learned? Challenges?

1. Always budget for 10% more than your rehab estimate. I budgeted 30K best case and 45K worst case and had based my offer on the worst case number. I initially got really excited that I might be able to finish the rehab within 25K (as mentioned in my prev. post) but there were couple of surprises that let to the budget going to 35K.
2. Removing junk is not that difficult/expensive. This house had a LOT of junk in it but after it was removed the house looked in great shape.

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

Message me and I can refer you to my lender/agent and PM company.