All Forum Posts by: Joshua Schmidt

Update: After our first tenant moved out, we did some light repairs and have a new tenant moving in Monday. They just signed a multi-year deal that will bring our monthly cashflow to over $600 on this one property AND we don't have a single penny left in this deal. Our COC return is infinite! Oh, and it will now appraise for over 300k and we owe less than 175k on this deal. HUGE win on this one!

Investment Info:

Single-family residence buy & hold investment in Sherwood.

Purchase price: $150,000
Cash invested: $55,000

Bought this house at an auction with traditional financing. We (my partners and I) put 20% down, which means we financed $120,000.00. We put 30k down and rehab was 25k. We will be all in for about 180k. Our plan is to rent it (contract already signed) for $1600 a month and refinance to pull our cash out. A little about the house, it is a 4 bd, 3 bath, 3000 sq ft, built in early 70s and is built in traditional style. We replaced roof, improved master suite with walk in closets, ripped all the paneling down, replaced with drywall, painted the whole inside of the house, white washed the brick fireplace, placed LVP flooring throughout the house, replaced counter-tops in kitchen and replaced vanities in bathrooms. Along with a lot more little details, this was a great first BRRRR and I think we will do many more! ARV came out to be 250K! Like stated earlier we were all in for 180K. Thats 70K in equity and we refinanced and pulled all but 5k out of the deal. Around Sep 2021 we will have all of our money out of the deal and reserves completely built from the returns on this property. This was a homerun in my book!

Update: House is now on its second tenant, who just signed a multiple year contract at $1800 a month. Cashflow on this property is now over $600 a month and we don't have a single penny left in the property....homerun!

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

ROI

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

Auction

How did you finance this deal?

traditional financing, then refinanced after the flip (BRRRR)

How did you add value to the deal?

Almost a complete flip

Looking for suggestions...so, relatively new investor here, we have about 6 units total. Our newest acquisition is our first to do with private money lenders. We had planned on using hard money to fund the rehab, but now the hard money lenders we have spoken with won't fund the rehab as they don't want to be in 2nd position. They would be in 2nd position because our private money lenders are in 1st position. We bought this to do a form of the BRRRR strategy, so the end goal is to 100% cash out refi.

Right now, the numbers look like this:

50k Purchase Price

50k rehab (probably less, but estimated high to cover margin of error and surprises)

140k ARV

110K All in rehab, closing costs and refi costs

This should allow us to cash out 100% with an 80% LTV refi loan. I'm a Realtor, and I have a good pulse on the local market as this is the market I work in. Also, I have a good friend that is a GC that has helped me with the rehab estimation and he will be handling the rehab itself.

So, any ideas on what we should do to fund the rehab? One idea I had was to just go ahead and refi with a construction loan, is that possible? Any other ideas? Thanks!

Congratulations Christian! Good luck moving forward!

@Kyle Alexander we (my partners) did our own work on this one for the most part. Subbed out a few things, roof and paint, but mostly did everything else ourselves.

That is good news!

There are some great areas in Jacksonville/Sherwood that are good for cashflow. There isn't a lot of other jobs in JAX besides the AFB, there are some, just not a lot. However, most commute into Little Rock/North Little Rock for employment. On that note, you won't have a problem renting the place out as the rental market there is fairly strong. There are some rougher areas, but nothing to bad. 

I've seen similar type of work from a HUGE builder with the initials RC....pitiful what they get away with!

@Ray Ellen thank you and it was an honor to serve this great nation!

@Jeff Chen that is about what I was thinking, just haven't ever heard if you could buy beforehand or not. I have bought at an auction before, so I know it can definitely be a successful venture if you do your homework. I guess it had just never dawned on me to ask the question of "Can I buy before the auction?" Thanks for your input!