My First BRRRR, First Failure, Still Better Than Stocks

[Sam Rockafellow]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $42,500
Cash invested: $76,500

BRRRR!!!

Bought this house with cash for 42.5k put in 34k worth of rehab, I bought it 4 weeks before COVID, Jan. 2020, finally finished it in June 2020.

Refinanced on month 7. It Appraised for 82k (Lower than projected) took out 75% / 61,500

Overall pretty happy with the investment, the rehab cost more than expected and the appraisal came back low so I left more in the deal than I wanted but at the end of the day I'm seeing a 12.8% COC return.

Biggest Lessons.
1. Budget for rental license ($650 In Lansing)
2. Double check estimated taxes
3. Lock in a Property Management company before purchasing
4. Don't buy four weeks before Global Pandemic

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

Too afraid to ask for additional capitol so I needed to utilize mine to its maximum potential

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

I fount this deal on the MLS. Put in an offer for 40,000 and they countered for 42,000. I Accepted

How did you finance this deal?

I used a loan from my 401k for some, savings from my own account, and I borrowed money from a family member for a 12% return on their dollar after 6 months.

How did you add value to the deal?

I added a bedroom and made a half bath a full bath

What was the outcome?

12.8% COC return and 20,500 in equity

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

Realtor was Erik Bagrowski. He is Top notch
Management company is DS Huber out of Lansing