Deal That Got Me Started - Live In BRRRR

[Jake Roland]

Investment Info:

Single-family residence buy & hold investment in Opelika.

Purchase price: $74,000
Cash invested: $17,500

Live in BRRRR deal. Bought for $74,000 at the end of 2017 put $17,500 into it doing all the labor ourselves. Now worth at least $150,000 and is currently rented for $1250/mo.

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

This was the best way to get started for us. We closed on this house and my wife and I got married the next day, we had to move somewhere so we fixed up the bedroom and moved in. Then redid the rest of the house one room at a time.

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

Found on the MLS. Very bad marketing, it was on the market for over 6 months because photos had tenants in them, property looked worse than it really was in the photos. When we went to see it in person for the first time, tenants had moved out, they had installed a new roof and water heater, and none of that was even mentioned in the listing. It was listed for $99,000 and we offered $70,000, worked our way up to meet at $74,000.

How did you finance this deal?

Private investor funded the front end, and then after repairs we refinanced with a traditional mortgage lender.

How did you add value to the deal?

Rearranged a laundry room to make another full bathroom/laundry combo to make the house a 3/2 instead of a 3/1. Updated kitchen, first bathroom, and flooring and paint throughout.

What was the outcome?

We were able to cash out about $27,000 over our private lender loan amount to get our repairs cost plus some from the BRRRR refinance, and now have at least $30,000 in equity in the property and it cash flows around $550/mo with it rented at $1250/mo.

Lessons learned? Challenges?

It is difficult to live in a space you are also trying to remodel, we had to do basically one room at a time because we moved in right away. But making sacrifices early is how you get ahead!

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

I got my real estate license just a couple of weeks before closing on this property, so I was able to collect the commission on the sale which was also nice because I didn't have a lot of money at the time.