First successful BRRRR

[Luke Harrison]

Investment Info:

Small multi-family (2-4 units) buy & hold investment in Jamestown.

Purchase price: $58,000

We were able to buy this duplex with $0 of our own cash as a product of completing our first successful BRRRR. We used a cash out refinance loan on another duplex that we own, and let our equity work for us to add another cash flowing asset to our portfolio. With the money we had left we also secured and purchased another duplex that was an reo foreclosure. 3 closings all done in the height of the Covid pandemic, it was very nerve racking, but we are very happy with the acquisitions.

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

We wanted to put our equity to work for us.

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

This was listed on the MLS, we made a low offer when we first saw it, the offer was not accepted, and they took another. After the pandemic shutdown started in March of 2020, the buyers opted out of their contract and the duplex was put back on the market. We came back with a stronger offer, and they accepted.

How did you add value to the deal?

With a basic remodle of the lower unit, which brought the unit to market rent.

What was the outcome?

Still holding the duplex with full occupancy since purchase, other than the couple of weeks it took, to fix up the lower unit.

Lessons learned? Challenges?

The lesson learned was that the BRRRR strategy is something that can actually work, and isn't just something you read about or hear on the pod cast. We did it, and are now in the "rehab" portion of a second BRRRR that brings us to 11 total units, and we can't wait to get to the "repeat" section for a 3rd.