First BRRRR closing on my birthday!
Hello BP friends! I'm extremely excited to tell you that I purchased my very first BRRRR deal this past week! I wouldn't have had the courage, mindset, or knowledge to do it without the help of all of you so thank you for being such an active and open community. I've spent the last two years finishing college and working on two small flip projects, and absorbing BP info, and it's a huge step for me to get into a rental and build some wealth. It's a 2bd 1.5 bath ranch in what I think is a B neighborhood East of Cleveland Ohio. It was on the MLS, I never thought I would get it because there were multiple offers the day of listing, but they accepted mine! I'll be financing half of it with my own cash from flips, and half from a private loan, then refinancing through a bank in 6-8 months if possible. I was looking in a cheaper area for a section 8 rental to pay all cash, but decided it was better to use some leverage and buy in a better area. The price was 161,500 with recent sales comps in the area around 215. With closing costs it's 163k, and I'll put around 2-3k into initial reno. It'll be turned back into a three bedroom as it once was, and for now I hope to do light renovation, just paint and some new fixtures. The comps in the area are all $1 a sq ft/month and with 1700+ sq ft I think I can get $1600-1650. The kitchen isn't great, and I'm wondering if I should renovate it now or wait until a few tenants have been through there? The oven in the photos is obviously coming out. It would probably cost me an additional 5k to redo the kitchen completely, and I don't think it would justify a raise in rent up past $1700. I realize this isnt a home run deal, but to me it was good enough to learn from, and I know I could sell it quickly if i had to. I I know the BRRRR strategy requires a renovation, but would it be wiser to rent it out for a year or two and see how people treat it then gradually make it nicer? What do you all think?
