3/2 BRRRR Deal in Jackson, MS (CJ Rose Properties, LLC)

[Carl Bo Smith]

Investment Info:

Single-family residence buy & hold investment in Jackson.

Purchase price: $16,000
Cash invested: $18,200

I found this little 3/2 1,200 sqft house posted by another local investor in a FB investment group I created. The house had a small fire in the kitchen about 2 months prior to my purchase. I bought it for $16k cash using funds from my HELOC. The rehab cost me $18,200 and I was able to finance $40,000 over 14 years after rehab. My payment for PI is $338/mo, insurance $77/mo. and taxes will be around $90/mo. This home rents for $950/month, of which I pull 25% each month into a holding account.

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

This was a win win for myself and a local investor looking to upgrade after this house had a small kitchen fire. It has a great return on investment for me and allowed the other investor to upgrade his holdings.

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

I created a FB group for local investors in Central Mississippi late last year. The deal was posted by another investor in my group. I ran numbers on the BP Calculator and offered what I could since this was another investor. He was asking $18k, I offered $16k and he and his partner accepted my offer.

How did you finance this deal?

I use a HELOC I have on my personal home for purchase and rehab whenever possible. I then go to the bank to finance out my capital to pay off my HELOC an then do it all over again.

What was the outcome?

The purchase and rehab put me all into this property at around $35k. I went to finance that money out and my banker actually offered to finance $40k for the property, so I went that route. I was able to fully pay off my HELOC and put a little over $5k into my reserve account.

Lessons learned? Challenges?

Check more closely for foundation issues with conventional foundations. I knew going in that this home had a little issue in one room but it did cost me around $700 more than I budgeted to shore up that one corner of the house. Also, anything with gas utility must be pressure tested by a licensed plumber if the house has been vacant more than 2 months (where I am). This cost me around $300 I wasn't expecting.