4-Plex BRRRR - Kettering/Oakwood OH

[Anthony Mirabile]

Investment Info:

Small multi-family (2-4 units) hard money loan investment in Kettering.

Purchase price: $142,000
Cash invested: $92,000

Cash to Close: $35,000
Renovations: $57,000

ARV: $210,000
70% LTV: $147,000
Owed to HML: $145,000 ($115,000 + $30,000 construction draw)

Rent: $800/mo
Free Cashflow: $250/unit ($1,000/mo)

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

Great location on the edge of Oakwood in Kettering! The property was partially occupied at purchase (2/4) with value add opportunities to capture higher market rent (+200/unit/mo) or even AirBnB income! The two rented units minimized holding costs and will provide tenant transition options. This property came at a discount due to unfortunate circumstances and deferred maintenance. We took the opportunity to invest for the long-term and BRRRR this cash-flowing property right on the Oakwood border!

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

Deal found on the MLS and negotiated through agent.

How did you finance this deal?

Deal financed through Hard Money Lender, 80% LTV at 12% plus a $30,000 construction draw. Down payment, closing, and remaining renovation costs funded through investor group.

How did you add value to the deal?

Planning to renovate all 4 units up to market rent with open floor plan, LVP flooring, upgraded kitchen and bathrooms. Plus some larger capital expenditures including replacing galvanized plumbing with PEX (plus individual unit meters) and minor roof repairs.

What was the outcome?

We are currently still in the renovation process, and anticipate not being able to pull all of our money out for a perfect BRRRR. But, we will have a higher quality property, more cashflow, and presumably less maintenance costs. Can't wait to update you all once we refinance!

Lessons learned? Challenges?

A Hard Money Lender will look at the property like an investor, which serves as an added underwriting check. Hard Money interest payments are expensive, so have a solid plan to get your renovation and refinance completed.

We are learning a lot of lessons on the renovation side, especially with the major plumbing work (galvanized to PEX). Have the conversations upfront with your contractors about permits and don't let coordination of licensed contractors derail your schedule.

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

Agent - Casey Hartman at Glasshouse Realty Group, she's helped us purchase our Dayton portfolio and is phenomenal!
HML - Darrin Carey - Dayton Capital Partners, he gives it to you straight and is a pleasure to work with!