Metro Detroit - Perfect BRRRR, No Rehab, MLS Deal

I just closed on my cash out refinance for this property and it was a perfect BRRRR with NO REHAB...and, it was sitting on the MLS for 78 days.

22061 Shakespeare Eastpointe MI

Felt this was a good experience to share.

Paid $77,500k

Rehab: $0 (already had a paying tenant and house was "good enough")

Appraisal Value: $102k (75% cashed out = $76,500)

"Wait, joe you left $1k plus closing costs in the deal"

"Na, it cash flowed $700+ a month after expenses for 6 months, I got all my money back"

1st Best Part...no rehab

2nd Best part...this thing sat on the MLS for 78 days

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Note:

I didn't go into this deal "NEEDING it to be a perfect BRRRR". I went into it knowing there was sweat equity and i was ready to exploit it.

The thing about Real Estate is most people aren't hitting home runs by waiting for the perfect pitch and then swinging for the fences...they are hitting home runs by taking what the pitcher gives them and then consistently hitting singles/doubles and then occasionally they hit one out of the park (as is this example)

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Anyways,

We noticed this was a very large 2 bedroom home in a nice location. Nice 2 bedrooms sell for $115k+ and this was the sqft of a 3 bedroom.

Also, in Nov of 2021, I knew home values were going to be higher in Spring of 2022 to give my ARV appraisal even better comps.

Basically, could tell it was undervalued and for some reason no one wanted it...

Observations

• - Noticed the listing write up was short/poorly written/uninformative
• - Listing photos were bad (pretty sure that's a google street view front pic, or maybe just a cell phone without even getting out of the car lol)
• - Listing agent was hard to get ahold of (predictable)
• - Was near impossible to get an approved showing (how it is 80% of the time on these types)
• - Tenant was Section 8 (there just went 75% of market interest)
• - Tenant was paying way under market rent $940 (another thing many aren't willing to take on. Remember, you're buying a long term investment..not a 1 year investment. Market rent is at least $1200 on this thing..it'll get there eventually)
• - DOM were accumulating

All things that deter demand.

No one wanted it because it was hard to visualize it working out.

Wrote a "sight unseen" cash offer saying I'd go straight to inspection..wouldn't waste time with a showing

Inspection revealed the property was in "good enough" condition.

House would definitely need cleaned up and updates for a turnover or resale..but already had a paying tenant.

Closed the deal. $77,500 cash.

Met with the tenant (nice lady and 2 kids) bumped up rent to $1050 (didn't feel like going super aggressive..just didn't need to. It'll get to market rent eventually, was more interested in a good relationship and no turn over)

Submitted my rent increase and paperwork to section 8 (not real hard) Rent Increase was approved

Normally I would do a nice rehab..but it already had a paying tenant and was in "good enough" condition.

My hopes were that it would appraise $100k+ and worst worst case a little higher than purchase price ,which, even then my ROI would be very high.

Fast Forward 6 months...Appraisal comes in at $102k

Through the cash out refinance and 6 months of cash flow this was an infinite ROI deal as it put every penny back in my pocket (plus more) through a more unorthodox "sweat equity" method of buying a low demand, poorly marketing property with barriers to entry..*on the MLS*

There were a few other little tips/tricks/insight we use for ourselves and our clients on stuff like this and I feel like i could write another 1,000 characters on the "perspective" of just this one deal...but i'm aware we've crossed the threshold of "too long".

Most of my deals are traditional, light sweat equity buy and holds. I'm under contract on a 1,000 sqft 3/1 in a similar market for $118k. It'll rent for $1450. Good enough.

Same story...sat on the market for some time and everyone else passed on it.

*shifting to a shameless self promotion (I've earned it right?)*

Bottom Line: If you aren't buying deals, it's not because they aren't out there. 90% of the time its a vision, confidence, and largely a perspective thing.. On top of the obvious, sourcing/analysis/resources part.

After closing hundreds of deals, FIRE Realty Team has refined the process of helping investors get from analysis paralysis and the "I can't find anything" stage -- to owning cash flowing portfolios.

Typically, I'm not one to reveal FIRE Realty Team "secrets" to non - FIRE Realty Team clients, as the above post sheds some insight...but I also know we have a good thing going and it makes a lot of people a lot of money so it's probably good to "give a taste" of how we can help investors.

Can't promise everyone a no-rehab, perfect BRRRR, but can definitely promise, we are very good at helping investors build investment portfolios.