Investment Info:
Single-family residence buy & hold investment in Suffolk.
Purchase price: $90,000
Cash invested: $5,000
This property was my first BRRRR. I bought it at auction, rehabbed it with my son, refinanced it and rented it out. It now cash flows nicely and I couldn't be more proud of the work we did. A LOT of sweat equity went into this once ugly house!
What made you interested in investing in this type of deal?
I was inspired by Bigger Pockets of course!
How did you find this deal and how did you negotiate it?
I discovered that an auctioneer friend of mine was having an auction. I showed up just to watch and learn! Haha! I ended up bidding on the property, but when the bid went too high, I stopped. It was so fun! However, the next day, the auctioneer called me and said the guy who bought it had buyer's remorse so he offered to sell it to me for my last bid. I took it!
How did you finance this deal?
I paid cash using a HELOC on my personal residence. Once it was rehabbed and appraised for twice the price, I refinanced it for 70% LTV.
How did you add value to the deal?
A ton of sweat equity! I brought the cash and my son and I did all the work ourselves. We increased the value by $60,000.
What was the outcome?
The outcome was that I was able to pay my son a good chunk of cash for his hard work and I was able to keep a buy and hold property that cash flows nicely with only $5,000 out of my pocket once it was all said and done. For a first deal, I am not complaining!
Lessons learned? Challenges?
Rehabbing a property by yourself is HARD WORK and takes a ton of time. Next time I will sub out more of the work... though I still love to paint and so some of the minor work:)
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
I worked with Ben Munson from Tidewater Mortgage in Virginia Beach, VA. He does a great job!
