Investment Info:
Single-family residence buy & hold investment.
Purchase price: $72,000
Cash invested: $35,000
A BRRRR deal on a single family home in Interlochen, MI near Traverse City.
How did you find this deal and how did you negotiate it?
This property was from the MLS. We made an offer same day it listed because the price was good and seeing the square footage I knew it could be more than a 2 bed home.
How did you finance this deal?
We got a 1-year interest only commercial loan from a local bank for the purchase and used a HELOC on our primary for the rehab. We had used the same type of loan on a previous property, a triplex.
How did you add value to the deal?
This was a 2 bed/1bath that was in pretty rough shape. At 1200 sq. ft, we turned it into a 3bed/1bath. The house receive a new roof, soffit & fascia, and siding. Inside the bath was gutted and received a new tub with a tiled alcove. Then we put vinyl plank floors, new counters, new doors, and new casings and baseboard trim throughout. The cabinets were painted and received new hardware. We installed a new hot water heater and blew additional insulation in the attic.
What was the outcome?
The property appraised at $80k above what was paid. We were able to get all purchase and rehab money back after the refi making it an excellent BRRRR deal.
Lessons learned? Challenges?
I need to stop doing so much work myself. In the moment, you think you can just do it yourself more cost effectively, but it ended up taking longer than it should have and the extra holding costs and missed rent could have justified hiring much more of the work. This will be our goal going forward, to look at things from this perspective and not try to do so much of the reno myself.
