Landlording & Rental Properties

Take a Video Tour of a BRRRR Investment Property

Expertise: Real Estate Investing Basics, Real Estate Deal Analysis & Advice, Mortgages & Creative Financing, Landlording & Rental Properties, Business Management, Personal Development, Flipping Houses, Commercial Real Estate
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Today I’m going to show you a property my company bought and renovated. There’s a lot of theoretical stuff on BiggerPockets, but I’m going to walk you through a practical, real-world example of a deal.

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This is a duplex on Center Street in Trenton, N.J.—a really great location near an up-and-coming community garden and park and and across from the local Boys & Girls Club.

We purchased this property for somewhere around $40,000 from a guy who was fixing it up for himself to live in and just ran out of gas and ran out of money. He was grateful to sell it and get his money back, and we were happy to take it off his hands.

Related: A Video Tour of My Rental From Hell: What Went Wrong & What I’m Doing to Fix It

BRRRR Investment Property Walk-Through

BRRRR stands for buy, rehab, rent, refinance, repeat. This is our intended strategy with this property, and we’re getting there.

When we bought it, the property was in pretty deplorable condition.

Here’s what we did in terms of rehab: 

  • Installed vinyl siding
  • Capped windows
  • Demoed dilapidated garage
  • Created two separate tenant entrances and eliminated common area
  • Replaced flooring
  • Resurfaced and painted walls
  • Created a kitchen and eating area
  • Brought piping and electrical up to code
  • Put in baseboard heat

And here are the numbers for the property:  

  • Purchase price: $40,000
  • Renovations: $45,000
  • Carrying costs: $5,000
  • Rent (two units total): $800 per unit

So, we’re just over the 2 percent rule that we talk about on BiggerPockets, which means it's a good cash flow play. Once we refinance, we should be able to complete the whole BRRRR strategy and might even sell the property to make a few bucks. We have a few options here.

You can find deals like this and local contractors to renovate, too, if you look hard enough in your local market. Leverage BiggerPockets as a resource—a source for inspiration, a source for ideas, a source to talk through problems and solutions on deals similar to this one.

Watch my video above for further details and before and after images!

Any questions? 

Ask away in the comment section below. 

Matt Faircloth, co-founder and president of the DeRosa Group, is a seasoned real estate investor. The DeRosa Group, based in historic Trenton, New Jersey, is a developer and owner of commercial and residential property with a mission to “transform lives through real estate." Matt, along with his wife Liz, started investing in real estate in 2004 with the purchase of a duplex outside of Philadelphia with a $30,000 private loan. They founded DeRosa Group in 2005 and have since grown the company to owning and managing over 370 units of residential and commercial assets throughout the east coast. DeRosa has completed over $30 million in real estate transactions involving private capital including fix and flips, single family home rentals, mixed use buildings, apartment buildings, office buildings, and tax lien investments. Matt Faircloth is the author of Raising Private Capital, has been featured on the BiggerPockets Podcast, and regularly contributes to BiggerPockets’s Facebook Live sessions and educational webinars.
    Jerry Maze Wholesaler from Portage, MI
    Replied almost 2 years ago
    Good location… I would think the separate entrances would be real attractive to potential buyers… when it’s all done it would be cool to see the finished product!
    Karen O. from NYC, NY
    Replied almost 2 years ago
    Nice job Matt. Good luck with it. However, aren’t you just under the 2% rule @ 1600/mo rental income (ie 90K * .02 = 1800)?
    Joshua Redmond from Riverside, California
    Replied almost 2 years ago
    Very Cool little video. I’ve been looking at more and more single families in my investing area with square footage to turn them into duplexes, ROI’s would seem to be better for me than the few true duplexes I own. Keep up the good work guys!
    Alexandra Chaploutskiy Rental Property Investor
    Replied almost 2 years ago
    Great video, Matt. Like you said, there’s a lot of theoretical stuff on the web, and it’s always helpful to see an actual rehab video with the numbers, so one can see how a specific project can work out in reality. Two thumbs up.
    Andrew Syrios Residential Real Estate Investor from Kansas City, MO
    Replied almost 2 years ago
    Great video Matt!
    Drew Solidum
    Replied almost 2 years ago
    Cool video, looks like it turned out great!