"Perfect" BRRRR in the Middle of the Pandemic

[Blake Dailey]

Investment Info:

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

Purchase price: $110,000
Cash invested: $50,000

Contributors:
Logan Boesch

BRRRR pulling all cash out at the refinance of this duplex and holding for cash flow.

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

It was a single family house with a full 2/1 bottom unit.

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

I found this deal lingering on the MLS. I offered on it back in September of 2019 but the seller did not accept. At that time, I think I offered around $125k. After sitting on the market for 6 more months I came back and revisited the agent. This time I told him he could be a transactional agent (represent both sides and collect double commission). After a little back and forth we landed on $110k cash. A $15k discount from my first offer 6 months earlier!

How did you finance this deal?

I purchased this house cash with a partner.

How did you add value to the deal?

We rehabbed both units to include redoing drywall and insulation, refinishing hardwood floors and adding LTP flooring, adding a new bathroom vanity, replacing some fixtures, andredoing the front deck and adding the back deck for separate access to the back unit. We also added soffit and fascia and put new siding on the back of the property.

What was the outcome?

We invested around $40k into the rehab and after closing costs, holding costs, and some miscellaneous costs, we were all in for around $50k on the rehab. The result was two new units in a good neighborhood that will cash flow well.

Lessons learned? Challenges?

Write out your own scope of work. I talked over the scope of work with the contractor and ultimately let him draft it up. In doing some we missed some items that we had to go back and redo costing us a little bit of time. I dig more into the details and lessons learned on my website multifamilyjourney.com under the "deals" page.