Successful BRRR in Dallas
We've acquired a handful of rentals over the last few years, but this is our first official BRRR (buy, rehab, refinance, repeat)! We bought the property in July 2015 and just recently did a cash out refinance in January 2016 (had to wait 6 months after purchase due to lender restrictions).
Purchase Price: $37,075
Closing Costs: $1,258
Rehab: $40,687
Holding Costs: $908 (taxes, insurance, utilities, etc. while vacant)
Total Investment: $79,928
Cash Out Loan Principal: $88,500 (75% of $118k appraised value)
Closing Costs: $2,682
Total Cash Out: $85,818
So at the end of the day, I walked away with $6,000 in my pocket and a cash flowing rental, not bad!
We were able to get a tenant in place 65 days after initial purchase at $1200 per month, so with all expenses accounted for we should cash flow about $300 per month.
True BRRR deals are few and far between in the highly competitive Dallas market, but I wanted to show that it is possible.
Comments (5)
Great post, @Andrew Herrig.
How did you come up with determining your ARV? Being new to this, that seems to be my bigger obstacle with determining the good, bad and ugly.
Lance Ray, over 8 years ago
My wife has her real estate license, so has access to the MLS. If you don't have access to MLS, you can get a realtor to run comps for you.
Andrew Herrig, over 8 years ago
Thanks for sharing these figures. I am still learning the BRRR strategy. For this deal did you have to put any of your own money into the deal? Did you have to pay down payment or closing costs or points on the purchase?
Rhondalette W., over 8 years ago
I used my own cash for purchase + rehab, then refinanced and pulled it all back out. You could just as easily use hard money or private money for initial purchase and rehab if you needed to.
Andrew Herrig, over 8 years ago
Very nice Andrew! A strategy I hope to reproduce in Fort Worth. Thanks for the numbers.
David Teague, almost 9 years ago