I found this little 2/1 1,000 sqft house while out D4$ in Jackson, MS. It was my first investment property. I bought it for $18k cash using funds from a HELOC I have on my personal home. The rehab cost me $13,800 and I was able to finance all of my capital back out of this one on a $32,000 finance over 12 years. My payment for PI only is $299/mo, insurance $71/mo. and taxes will be around $90/mo. This home goes for $800/month of which I pull 25% each month into a holding account.

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

Jackson, MS is full of deals like this if you are willing to put in the work to find them. The return on investment is phenomenal in this area. It was a great, low price, low risk deal to start my investing journey.

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

I found this deal while out D4$ (driving for dollars) in the area. I saw the house and noticed it was vacant. I actually used the Deal Machine App to send the owner a postcard. The owner responded saying that he had planned to use it as a rental himself, but just never did. After using the BP Calculator for BRRRR I made the offer of $16k. The seller wanted $21k but we ultimately settled at $18k, I paid closing, which was around $700 for this deal.

How did you finance this deal?

I initially purchased using a HELOC I had got on my personal home. I then reached out to smaller, local banks. It turned out I knew the VP of a local branch. I offered to take him to lunch and show him my plans. I used the PDF print out of my numbers from the BP Calculator with my LLC logo added to make it look professional. He ended up offering to fund this and future deals of the same type, and also HE PAID FOR MY LUNCH. It was a good day and beginning of a great relationship.

How did you add value to the deal?

The house had been vacant for two years so we aired it out and cleaned what we could. I hired a contractor and we trimmed limbs outside, repaired fencing, all new appliances, removed and replaced all flooring with laminate, full paint job inside, new toilet, new ceiling fans, and new faucets. We also put up all new blinds, new door knobs, new shutters, and pressure washed the outside.

What was the outcome?

Closed 12/17/19. Tenant moved in paying $800/mo rent with a year lease on 1/27/20. After the full rehab I was able to pull out 100% of the money invested during financing. I paid off my HELOC and began searching for my next deal.

Lessons learned? Challenges?

That the BRRRR strategy works if you plan and know your numbers. Research and knowledge are key, but don't get stuck in analysis paralysis.

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

I have a friend that is a broker and investor that gave me a few pointers after the purchase during the rehab phase.