Kansas City,MO BRRRR #1

[Young Park]

Investment Info:

Single-family residence buy & hold investment in Kansas City.

Purchase price: $53,000
Cash invested: $96,000

3bed/2bath, 2-car garage, 1412 sq ft, 1952 yr built - SFH

PP: $53k
rehab: ~$44k
All-in: ~$97k (PML $90k)

Appraised: $142k
75% LTV: $106.5k
cashout refi after closing fees: ~$102k

Current rent: $1020 ($995 + $25 pet fee)

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

I live in Hawaii, where it is extremely difficult to cashflow. I chose to invest in cash-flowing rental properties and build long-term wealth through buy-and-hold.

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

Found it off of Craigslist! This was from a wholesaler who actually had the motivation to close quickly (closed in 5 days). This was listed for $65k, but because the wholesaler wanted to close before his family reunion, we were able to negotiate down to 53k.

How did you finance this deal?

Mostly through private money lenders (PML) and some out of my pocket.

How did you add value to the deal?

Did a full rehab - floors, paints, new bathrooms, electricals, fixtures, etc. Spent ~$44k.

What was the outcome?

Rented out for $995 + $25 in pet fee = total rent $1,020/mo
Appraised for $142,000 and did a 75% LTV cash-out refinance on a 30-yr fixed.
Cashed out ~$102k after closing costs - 97k (all-in) = $5k in my pocket + NO MONEY left in the deal!

Lessons learned? Challenges?

Extensive weather delayed the project significantly and completed just before Thanksgiving. Had a difficult time placing a tenant during this time and it was vacant for nearly 60 days before getting it rented. Rented about 100-200 lower than I would've liked.

The refinance process took over 3 months due to the appraiser requesting a structural engineer to assess the basement crack. This took additional time to get quotes and coordinating with the tenant & the foundation company.

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

This was my very first project and I worked with my mentor and friend, CJ Calio. I was able to use his contractor who has been work with CJ for several years. He recommended me a few of his property managers that he's been using and I hired one after interviewing them.