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Updated almost 4 years ago,
Second single family buy & hold in Burlington (amateur BRRR)
Investment Info:
Single-family residence buy & hold investment.
Purchase price: $85,000
Cash invested: $35,000
Contributors:
Tom Knodt
Well-maintained 3bed/1bath that we bought as an estate sale from the family that had owned it since it was built in 1958! Only 900 sqft, but a very well-designed layout, and 600 sqft+ of additional storage space in the well-maintained sheds outside. Our property manager has been able to fill our Burlington rentals very quickly, so this one is working out well for us so far.
What made you interested in investing in this type of deal?
Good cashflow potential in Burlington NC
How did you find this deal and how did you negotiate it?
Our agent found it on the MLS. He had been watching the listings like a hawk and was able to alert us to this one minutes after it came on the market so that we could jump on it. Seems to be the only way to snag something off the MLS in the hot market these days!
How did you finance this deal?
We purchased in cash, roughly half of which came from a HELOC
How did you add value to the deal?
Unfortunately there was not much room for value-add in this one, and in fact our all-in cost (purchase plus mostly cosmetic rehab) ended up being a little bit above the appraised value. However, our returns are good so we are not too upset about that.
What was the outcome?
After 6 months, we did a cash out refinance and paid off the HELOC. Cashflow is currently >$350/mo for >12% CoC ROI. We hit all of our numbers goals except for cash left in the deal (close to the $35k).
Lessons learned? Challenges?
Purchasing our second property in Burlington was much less stressful than our first! We were surprised by rehab estimates from multiple contractors, and learned that COVID was causing increases in the cost of certain materials etc. So one lesson learned is that previous projects can provide a great starting point for estimating rehab costs, but it's also important to keep in mind factors that might cause the prices to fluctuate.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
Yes, feel free to message me!