Flip turned rental BRRRR

[Thomas Magill]

Investment Info:

Single-family residence buy & hold investment in Kings Mountain.

Purchase price: $69,000
Cash invested: $55,000

This project was originally purchased to flip, but after speaking with the property owner next store, I was able to get that property under contract. So, I decided to keep this property as a BRRRR. This area is a little far from where I live so it didn't make sense at the time to keep this property, but after further thought, and getting the property next door under contract, I reconsidered.

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

The further along we go into this cycle the more expensive properties get, so I've had to adjust my investment locations. This property is located in Kings Mountain, NC. Kings Mtn is about 45 min outside of Charlotte. Kings Mtn is in the process of building a casino and I felt the property values would significantly increase due to the influx of population. I continued to study the area and realized this town could stand on its own with or without the casino, so it solidified my decision.

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

I found this deal through a wholesaler. He originally had the deal out there for 90k I believe and we made our way down to 69k. The wholesaler made 24k on the wholesale fee, and I believe the property is worth 156k. So, after investing 124 into the deal I created at lease 30k of forced appreciation.

How did you finance this deal?

I self financed the purchase of this deal, and got an unsecured construction loan from a private money lender.

How did you add value to the deal?

I did a full renovation of the interior/exterior of the property, as well as convert a mechanical closet into another bathroom. So, the property went from a 3/1 to a 3/2.

What was the outcome?

The project took 2 months to renovate and put a tenant in place. I had to wait for the property to season in order to refinance to a conventional loan. I'm currently in the process of the refinance and it should be closed by 12/3/21.

Lessons learned? Challenges?

This project went very well. I learned on this project to adjust the home to the window sizes rather than get custom windows and have to wait 3 months for the windows to arrive. The height of the windows were all standard, but the widths needed to be adjusted. So, rather than waiting 3 months my team built the sides of the windows in to fit the standard (in stock) windows.

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

I worked with one of my private lenders. He is someone who has been lending me money for a couple years now. He is a retired GM employee, who is a fantastic, patient guy. He removes a lot of stress from my life.