BrrrrNado to AirBrrrr&B

[Robert Russotti]

Investment Info:

Single-family residence buy & hold investment in Raleigh.

Purchase price: $85,000
Cash invested: $800

This home started as a lease option that became a live-in BRRRR that was destroyed by a tornado and rebuilt into an Airbnb.

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

I had no money to put down and no credit.

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

A good friend told me that there was a house to rent a couple of doors down from him in downtown Raleigh. I asked the owner of the home, a real estate lawyer if he would be willing to owner finance the home. We ended up in a 3-year lease with the option of an 85k buy out at the end. A year and a half into the lease, mid-May of 2008 as the market was eroding, I was able to purchase the home with help from a friend.

How did you finance this deal?

My friend purchased the home, he added me to the deed as T-COMM the following month and I refinanced in 2009 after the market had crashed.

How did you add value to the deal?

After slowly refinishing the hardwoods and painting inside and out, a tornado totaled the home. I rebuilt a new home in 2012.

What was the outcome?

I was able to HELOC the home, buy and rehab a second home for cash leveraging that home to buy 2 more homes. I created an Airbnb and now have 5 investment properties in Raleigh.

Lessons learned? Challenges?

Make sure you know how many 401k loans you can borrow and payback in a 12 month period. Getting blindsided and having to pivot to hold the deal together will certainly show you where to look to ensure your funding is secured.

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

Melissa Gordon
Coldwell Banker Advantage
6020 Creedmoor Road
Raleigh, NC 27612