First BRRRR a success!

[Brian C.]

Investment Info:

Single-family residence buy & hold investment in Colonial Beach.

Purchase price: $72,000
Cash invested: $35,000

First BRRRR. Got all my money out and then some! Ironically, I put the least amount of effort into than any other property and it's the most successful. By less work, I mean I didn't actually do the rehab like normal, I hired it out and just made sure the numbers worked.

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

I quickly realized I could not reach my goal of obtaining more rental properties if I had to keep saving up a down payment that I wasn't going to get back.

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

I found it as an REO on the MLS. I offered way under asking (originally offered 65 and it was listed for 148 originally and reduced to 118). We ultimately settled on 72,277.

How did you finance this deal?

A combination of a private lender and my own funds for the purchase and a HELOC from another rental for the rehab.

How did you add value to the deal?

Rehabbed the whole house. One of the biggest value adds was converted it from a 2 bedroom to a 3. It was very easy to do because it was actually originally a 3 bedroom converted to 2. I just threw up a wall and closed off a door.

What was the outcome?

It appraised for 176, so I was able to pull out 132k but had only about 110k in it.

Lessons learned? Challenges?

Don't be afraid to offend a seller, especially on an REO. Just be respectful and let them know you understand they may not be able to come to your number, but that's the number you need to be at. If you can't come to terms on a deal, best if luck to them.