1st Out of State BRRRR Property

[David Chappell]

Hi Everyone! I am getting close to my first completed deal, so I thought I would post some details here to share my story.
After lurking on the forums here for about a year I finally decided to start taking some action and putting my name out there. I am currently living in Austin, TX investing in SFH rentals in Birmingham, AL. I received a call from a wholesaler one day, I guess I had submitted a form on their website to add me to their list. Anyways, I explained to him what I was trying to do and told him the parts of town i was looking at. I had just taken out a HELOC on my primary residence and had $$ available to spend. He called me about an hour later and told me about a property he was about to send out to his list. It was just what I was looking for and in the right part of town too. I had recently had a call with a realtor in the area and I paid him to go take a look at the property and to give me a rundown of ARV and estimated rehab budget. I had run the numbers 20 different ways and they all seemed to work, but I was still worried. I was tired of being in the analysis paralysis phase so I decided to go under contract with the wholesaler a few days later, I figured worst case scenario I could sell it for a loss and learn a lesson. Over the next few weeks, I worked with my new property manager to help get bids and start the rehab. A month or so later it was on the market and then a month after that, a tenant was in place!

Here is how the numbers played out:
Purchase Price (cash from HELOC on primary residence) - $74,500
Rehab - $14,300
Holding Costs - $1,200
ALL IN COSTS - $90,000
Appraisal - $123,650
75% LTV Loan minus Closing Costs - $90,037

So after the 30 yr refi (conventional 30yr fannie/freddie rate term 3.37%), I have invested $0 of my own money in this property and its cash flowing $330/month.

Somehow my first BRRRR strategy worked out to the T and I have zero of my own money into this property which is awesome. I got a little excited and made 2 more acquisitions pretty quickly after this, so I am hoping those workout the same.

I would like to say I am 10000% confident I would not have had the courage to make a move like this without the kind souls on this forum. The contributors to this forum are truly willing to help others and I cant thank you enough for that. Everyone has helped me more than they know, and I am so excited to start this journey to help my family gain financial independence through real estate investing. Thank you SO much. 

[David Chappell]

Originally posted by @Melissa Harris:

@David Chappell thank you so much for sharing your story! I am at the same cross roads with just taking ACTION and submitting offers. I need to just believe in the education that I have received on here and go for it! Like you said, if it doesn't go as planned then I will learn a lot of lessons but then I know how the process works from the beginning to the end and make the other buys a lot better!

Yes! Massive Action :) It did make me feel better knowing that the worst case scenario would be me selling the property for a small loss bc I couldn't get it rented etc..so that made me feel a little better. It's always easy to say "just stop looking and take action" but I guess I just had the right motivation that day and it made every decision after that much easier to make. Best of luck!