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Updated about 3 years ago,

User Stats

31
Posts
13
Votes
Ben Magee
  • Real Estate Agent
  • Raleigh, NC
13
Votes |
31
Posts

First BRRR deal (doubled in value).

Ben Magee
  • Real Estate Agent
  • Raleigh, NC
Posted

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $128,000
Cash invested: $35,000

Appraised at 238,000. Pulled out 80% (72K) in cash out refinance. Property management fee is accounted for in cash flow after expenses. Potential long term conversion of another 600 square feet of basement that has a full bathroom to increase livable square footage.

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

The homes around it were 1.75 or more than this home. This home was considerably larger, so much more opportunity to rent higher or house hack. There were bathrooms that didn't work, but three full bathrooms were a strong consideration.

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

We found this on the MLS. In Iowa, you can work with the seller's agent as a dual agent. We contacted the sellers agent within an hour of it coming on the market.

How did you finance this deal?

GreenState credit union gave us a 5% down, 2.75% 30 year mortgage. Bought it during the covid-19 lockdown.

How did you add value to the deal?

Put some sweat equity, and worked with 10 subcontractors. Full remodel (hardwood floors refinished, complete remodel of two baths, painting the entire outside and all the trim inside; new flooring in basement and kitchen; new cabinets ; added a/c to rooms).

Lessons learned? Challenges?

while the numbers reflect well, we invested significant amounts of time, to where because I earn a lot of money hourly, I lost money from that stand point. This is my first deal and it went really well all things considered, and it got me to interact with the local housing authority for permits, it got me to interact with financing and banking to understand HELOC vs cash out refinance, renovation sources of funding. It also got me to work with so many contractors and learn how to ask help.

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

Worked with lenders and other agents on how to do it. Pete Johnson from Greenstate is very helpful for local lending.

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