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.
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 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.
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!
Ask away in the comment section below.