First BRRRR in Edgebrook Houston Area

[Babes Hoffower]

Investment Info:

Single-family residence buy & hold investment in Houston.

Purchase price: $95,000

Single story 3, 2, 1

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

This is a base hit and got me started.

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

After listening to BPs for about a year and saving up some cash, I started telling people I was an investor. That is when I found out my employee had a problem. His MIL had passed away 4 years earlier. His sister-in-law could not let go and would not let them do anything with the house. It took me a few months to gently paint a new picture for her on how this house could be a new beginning for another family. They wanted a certain price. After inspection, I offered them $5k less. We agreed.

How did you finance this deal?

At first, I paid cash for everything. Once I got it rented, I was able to pulled out everything. A perfect BRRRR. My holding costs were about $2,000 for the 6 months it took for rehab and renting it. I have a 30 year fixed at 3.625%.

How did you add value to the deal?

I put in central HVAC, up-graded the electrical with permits, tore out one full bathroom and redid it. Granite in the kitchen. Painted the cabinets. I put in an oven. Yep, no oven. Put in microwave and vent. Tore out all the carpet, had the hardwood floors redone and put vinyl wood over the linoleum. Had it painted. New water heater. Had the tree and shrubs all cut back. After it was rented, the tenant requested gutters along the front porch. So I put gutters there and in the back too.

What was the outcome?

The house looks great. My tenants are wonderful and they signed a 2 year lease. And Bam! Now I am officially an investor.

Lessons learned? Challenges?

Interview more contractors and check in more often. He did things out of order and it cost me. He painted before my electrician was done rewiring, so the drywall was cut. Also, don't pay your contractor too much at any one time. He did a terrible job at the end.

The rehab was completed the day before Thanksgiving. I had trouble renting it. I was trying to do it on my own. I think giving myself a week or 2, then hire an agent to find renter would have been better. I waited until Feb.

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

Terri Clawson helped me find my tenants.