Hello everyone,
It's my pleasure to share our experience of the very first BRRRR story. Any comments and advice are welcome.
Bought the property at public auction, purchase price 166K, occupied. We pulled out HELOC from primary residence, 401K, savings to cover. Closing cost around 4K (including 1K unpaid condo fee). The next day after closing, we sent out a text message to the occupant (previous owner) to see whether she wanted to talk. We met on the third day and she just needed 4 more weeks to wrap up and move on and declined any of our financial help. She moved out as agreed, cleaned the whole apartment.
We renovated the whole place and replaced everything: 3 new windows, 5 news doors, luxury vinyl plank across the bedroom/living room, tile across all kitchen/bathroom, brand new bathtub/vanity/kitchen cabinets/stainless appliances/light fixtures/window AC. Spent around 21K on renovation (materials and labors included).
3 weeks post-renovation, we rented the apartment out $1,875 (cash flow $1,300)
For the cash-out refinancing, 8 months after we purchased the property, appraisal price 250K, pulled out 75% which is 187.5K, closing cost 2250. After refinancing, we successfully pulled all our money out (166K+4K+3K+21K-10K-185.2K) the cash flow changed to $370/month.
Detailed numbers:
Purchase Price 166K
Closing cost 4K
Expenses for the 3 months renovation 3K (HOA fee, property tax, insurance, electricity, HELOC interest, 401K interest)
Renovation 21K
Cash flow for the 8 months 10K = 1300x8
Cashout equity 187.5K-2.25K=185.3K
Our money in the deal -1.3K.
After the refinancing, we purchased another 4-family multifamily, just closed. Thus there comes the final R.
More finished pics
