Single family home located in Portage, Michigan. We just signed a lease with a tenant for $1,600/month. After PITI and setting aside $225/ month for reserves, this property will generate $400/month in positive cashflow.

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

We knew this was going to be a great BRRRR property from the beginning. It didn't hurt that the city of Portage has a strong local job market and a great school district. The yard of this property backs up to a beautiful park and public lake access is within walking distance.

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

My fiancé and I were on a walk and noticed the house in pretty poor shape. I cold called the owner and found out they were getting ready to put a FSBO sign in the front yard. We immediately met them at the house for a tour. After our original meeting, we offered them $80,000 to which they countered $145,000... After some back and forth, we originally ended up walking away from this one. However, they called back three months later asking if we could come up to $85,000 and we accepted.

How did you finance this deal?

Used hard money for the purchase and a HELOC for the renovations.

How did you add value to the deal?

This place was a mess. There was so much stuff in the garage we litterally found a truck while cleaned it out. All together, we hauled out five 30 yard dumpsters of garbage.

We replaced roof, some new windows, new A/C, flooring, quartz countertops, new appliances, basic bathroom remodel and gave the exterior a facelift. All together, we ended up putting a total of $27,000 into the renovations.

What was the outcome?

After renovations were complete, the house appraised for $190,000. We refinanced at 75% LTV, and the bank cut us a check for roughly $140,000. We paid back our hard money lender $85,000 plus $11,500 in interest, and repaid ourselves for the renovations. After subtracting another $2,000 for additional holding costs, we walked away from this one with no money left in the deal and ultimately put an additional $14,000 in our pocket to put towards our next investment.

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

We saw this deal through ourselves from start to finish. The house was in probate and there was a second mortgage on the property, so there was a lot of coordinating with the title company, seller and bank. This was our first time going through an transaction withing an agent so we enjoyed getting to experience all the nuances ourselves.