My First BRRRR Deal in Cleveland

[Mike Trzaska]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $41,000
Cash invested: $89,000

This property was a BRRRR deal, completed during the midst of the COVID-19 pandemic. Renovations took twice as long as expected, but was able to stay on budget by using a great handyman and doing alot of work myself. Spent 2-3 nights per week at the property and a full weekend day for the better part of eight months, but it was all worth it.

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

Wanted to do a BRRRR as my first deal to recycle seed capital and keep momentum. House was owned by same family since 1920.

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

MLS. Was on market for 2 weeks in very hot market. l I presented a cash offer 20% lower than list right before Christmas, and settled slightly above my offer. Wrote a personal note to the family, explaining my plans for the home. Love house shopping in winter...

How did you finance this deal?

Cash - My Own

How did you add value to the deal?

Full renovation. House was listed as a 4/1. Added a bath to the second floor, as most homes in the area either only have one bath or second bath is below grade.

What was the outcome?

Perfect BRRRR. Refinanced all my investment out and rented for almost $200 more than I ran my numbers at.

Lessons learned? Challenges?

-It is my responsibility to build a process and timeline for my contractor to follow.
-Picking up tons of material from Home Depot is no fun. Have everything delivered in 2-3 drops.
-Should have started sooner.

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

Yes, Mark Deeter of Keller Williams

[Mike Trzaska]

Originally posted by @Ryan Cleary:

Hey Mike,

I must say that you are the first successful brrrr I have heard of in a long time and I am very impressed!

How much was your appraisal and cash out refi for?

Thanks Ryan. Appraisal was for $128k, took out 96k which covered all expenses including loan closing costs. Now in full transparency, there is a lot of my own labor and time away from family not accounted for. 

I also think the fact it took twice as long to Reno helped me because COVID took prices up which were accounted for in the appraisal. First time anyone probably said doubling a timeline helped them.

My goal for the next BRRRR is to buy it even better on the front end and eliminate as much of my time as I can from the Reno.