My First BRRRR Deal - Central AR

[Myka Artis]

Investment Info:

Single-family residence buy & hold investment in Sherwood.

Purchase price: $47,336
Cash invested: $24,000

June 5th 2020
We just purchased this property on Friday June 5th 2020 from auction.com. We plan on getting into the property on Monday June 8th 2020 to assess the work that needs to be done. Our budget for rehab is $36,000. We have the ARV at 105K and plan on refinancing in 6 months and keep the property as a short term rental.

January 5th 2021
The appraisal for the property came in at 95K but we got away with only putting in 24K for the rehab. The property is now an STR property and cash flowing $1400/mo.

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

I put on my 2020 goals to pick up a BRRRR deal and try the strategy.

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

I found this deal on Auction.com. I was able to get it for about 48K. I waited until the last minute to put in a bid and we won!

How did you finance this deal?

I financed this deal by doing a refinance on another investment property and using the cash out from that. I then used a business line of credit for the rehab.

How did you add value to the deal?

We put in new luxury vinyl plank floors throughout the entire house, new paint, new cabinets in the kitchen, put in a new driveway, and extended the patio area.

What was the outcome?

We were able to get the house to appraise at 95K. We put in a total of 72K into the deal. We are able to pull out $64,200. We put the property up as an STR and it cash flowed well over 2K each month so we were able to recoup the 8K that we ended up spending really quickly.

Lessons learned? Challenges?

The lesson learned was to be better with our comps. We accidentally comped our property with properties that had 2 bathrooms and we didn't take note that our property only had 1 bathroom after we were able to get inside of the property. I got too excited. I also should have added a 2nd bathroom in the rehab process to get more value and space.

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

We ended up getting this property out of the auction so we didn't work with any agents initially. If I did I probably would have done a better job on my comps so that's a lesson learned. Use an agent!

We did use New American Funding for the refinance.