BRRRR & $200k Equity on 2 duplexes

[Jim Kittridge]

Investment Info:

Small multi-family (2-4 units) buy & hold investment in Concord.

Purchase price: $140,000
Cash invested: $30,000

Purchased two duplexes for $140k and have no money in the deal after BRRRRing it.

We retained the tenants, made moderate improvements, and negotiated a $200/mo increase in rent for each unit.

It appraised for $340,000 when we refinanced it at month 9.

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

Substantial amount of equity and room to add value in a fast growing suburb.

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

We found the deal through our direct seller marketing efforts and were able to help the seller get out of the landlording business at the price he wanted.

How did you finance this deal?

Financed it through a commercial lender at 85% LTC on purchase and rehab.

How did you add value to the deal?

Made moderate repairs and increased the rent by $800/mo or $9,6000/year in total.

What was the outcome?

We pulled $60k out of the deal after paying back the initial down payment and still have <60% LTV on the property.

Lessons learned? Challenges?

If you see a good deal, jump on it. We called the owner every day after he told us he wanted to sell to us and that he was just busy. 3 weeks later, we almost lost this deal to another investor for the same price.