First deal was a full BRRRR triplex!

[Nolan Gottlieb]

Investment Info:

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

Purchase price: $122,500
Cash invested: $55,000

This was a BRRRR property in Commerce, GA. It's a triplex.

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

I was ready to get started investing and saw this deal pop up. Knew I had to jump at the opportunity.

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

This deal was on the MLS for $125K and got it UC for $122,500.

How did you finance this deal?

Hard money loan into a BRRRR.

How did you add value to the deal?

Cleaning, painting, fixing walls, rewired the entire property, installed HVAC.

What was the outcome?

Full BRRRR with an $8K check at closing.

Lessons learned? Challenges?

Hard money loans!! Make sure you understand the draw process. I wasn't ready for it and it surprised me.

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

I'm a licensed agent and this property was on market.

[Nolan Gottlieb]

Originally posted by @Matt Anderson:

@Nolan Gottlieb

Congratulations on this success! Hopefully it is bringing you some strong cash flow.

I'm interested in hearing more about the lessons learned from the HML - what specifically did you learn about the draw process that surprised you? I am interested in also doing a BRRRR on a small multi but am intimidated by the idea of a HML (likely because I haven't educated myself enough on it).

I didn't realize that the draw process was based upon the itemized budget you submit before closing. For example, if you are estimating that your total rehab budget is $50K and you've budgeted $3K for flooring, but your actual floor budget is $5K, then you're going to have to cover that from a different portion of the budget. The inspector will come out (which costs $300 PER DRAW INSPECTION) and give you a percentage completion for each line item. So if he/she deems that half of the flooring is done, then they'll give you $1500 in your draw check. You have to front the money and the HML will reimburse you. Not a fun process...especially if you're not expecting it.