4rth Investment Property and 2nd BRRRR

[Randy Smith]

Investment Info:

Single-family residence buy & hold investment in Atlanta.

Purchase price: $90,000
Cash invested: $42,500

4/2 BRRRR SFR.

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

My wife and I love the BRRRR strategy because there are great tax benefits from the rehab costs and it creates instant equity. It also provides us with a great long term rental with limited capex in the first few years because all of the systems are replaced during the rehab.

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

This was an MLS deal and we offered asking price due to a hot market.

How did you finance this deal?

We have leveraged a HELOC for all of our deals up to this point. We'd like to increase our volume so we'll need to start looking at hard money soon.

How did you add value to the deal?

We replaced the kitchen and the bathrooms, converted a large addition into a 4th bedroom and added all new finishes. We also updated the electrical panel, replaced the furnace, repaired the HVAC, replaced the roof, and replaced all of the windows.

What was the outcome?

This property is in the final stages of rehab, and we are hoping to have it refinanced and leased in the next 30 days. Our goal is to refinance and pull as much of our money out as possible to move onto the next deal. Our initial estimates show that we'll be able to refinance at 75% ARV and cashflow around $200/month.

Lessons learned? Challenges?

-Schedule weekly calls with contractor to hold them accountable and keep us involved in the rehab
-Get multiple bids on rehab on the front end, and cheapest is not always the best option
-Communication with partners is key
-COVID caused a delay in completion so always plan on extra holding costs

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

Trey Brunson is our realtor that handles our acquisitions, and he has been a fantastic resource for sourcing properties, walking properties, and staying on top of our contractors. He's our feet on the street, and we couldn't do this without him.