Just completed my 3rd BRRRR

[Matthew Nicklin]

Investment Info:

Single-family residence buy & hold investment in Powder Springs.

Purchase price: $90,000
Cash invested: $30,000

This is my 3rd BRRRR and 7th rental property. This is my 3rd BRRRR I have done where I was successfully able to pull out 100+% of my invested capital from the refi and still have a generous monthly cash flow with the new loan amount.

I purchased this property off market. A good friend of mine actually gave me the lead on the deal and got me in touch with the seller. The property was in rough condition as the previous occupants had thrashed the home and the seller wasn't in a position to rehab it as he had a lot going on at the time. So he agreed to sell it to me at a discounted price.

Purchase Price: $90,000
Rehab costs: $30,000
Total invested: $120,000

Got the property rehabbed in a little over a month. We then found a tenant to lease the newly rehabbed property for $1,395. I waited the necessary seasoning time for a conventional cash out refi and the property appreaised for $175,000. I took out a loan at 75% LTV on the new appraised value so I got a loan amount of $131,000 on a 30 year term.

With my mortgage payment, taxes, and insurance my payment is $835 per month.

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

I love investting in single family homes in solid areas and if I can BRRRR them it is even better.

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

A personal friend of mine gave me the lead and got me in contact with the seller. I could tell the seller was motivated as he mentioned having several things going on in his life that prevented him from spending time to rehab this property.

How did you finance this deal?

I used a HELOC on my primariy residences for the initial purchase and rehab of this property. After the property was rehabbed and occupied by a tenant I waited the necessary seasoning time to do a conventional cash out refi to pull all my money out of the deal.

How did you add value to the deal?

By completly rehabbing the property. New kitchen, new paint through out, new floors, new tub, new hot water heater, and general touch up.

What was the outcome?

A sucessful BRRRR where I was able to pull out 100+% of my investment and leave me with an unlimited cash on cash return as I had $0 in the deal after my cash out refi.

Lessons learned? Challenges?

It is good to tell everyone you know that you invest in Real Estate, you never know where your next deal is coming from.

It is worth waiting for a deal, dont rush into the first property you find. I have been able to complete severall BRRRRs now by waiting for the right deal and not rushing into something.

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

I am a Real Estate Broker in the Atlanta Market. So I know the market well and that helps me in making offers and estimating rehab costs.