Cincinnati OH (Norwood) BRRRR

[Jordan Noble]

Investment Info:

Single-family residence buy & hold investment in Cincinnati.

Purchase price: $45,000
Cash invested: $26,772

I purchased this property as my first BRRRR. Single Family 2bd/1ba house in Cincinnati OH (Norwood neighborhood)

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

As a young professional with limited capital i knew value-add and refinance was the best way for me to continue do to deals without having to constantly save for capital. The snowball effect could not be more evident to me as I reflect on this deal just 18 months ago. I was hoping at the time to be able to do 2 or 3 deals every year and already I am on pace to do 6 this year with goals of double digit investment deals in 2022.

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

This deal was on the MLS (those were the days) and was right when COVID had hit so there wasnt a lot of competition.

$45k was the list price and was a price i was comfortable paying.

How did you finance this deal?

$50k was borrowed as a small business loan from LendingTree (not a mortgage). I would not recommend this as i paid 7 points (yes you read that correctly) and 9% interest. I wasn't familiar with hard money and just wanted to do a deal. 7 points only came out to $3500 because of how inexpensive this deal was but definitely could have been costly if used on other deals.

The rehab funds were pulled from a HELOC.

How did you add value to the deal?

Complete rehab. Replaced all lathe/plaster with drywall, removed 2 walls to open up the floorplan.

What was the outcome?

$120k appraised value with about $72k invested.

Took out a mortgage of $90k which paid everything back and left me a little cash in pocket.

PITI is $495/month and this rents for $995 (will probably get $1100 when re-rented later this year)

Lessons learned? Challenges?

The biggest lesson learned throughout this deal was gaining a better understanding of the construction of these old Cincinnati homes. Before this I had never dealt with lathe/plaster or knob and tube wiring. Overall though it couldnt have been a smoother first deal and i'm glad it was because as i've dove into more deals since I could see where a lack of motivation could come into play if you run into major issues on deal #1.

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

Varun Varma is the real estate agent who helped me find the deal. He is an extremely savvy investor himself and taught me some things along the way. He was the agent who encouraged me to get into the industry full-time as a licensed agent and how to build a pool of investor clients. Being an investor yourself before being an agent makes this much easier.

Bethany Ritchey at Fairway mortgage for all things residential mortgages. She is an absolute closer.