Pretty Excited about getting my first BRRRR deal under my belt!
bought a 3/1 1100sf SFR in a class C neighborhood for $30K. The house was on the MLS for a few months with very little traffic. As soon as I stepped into the house I knew it was the one I've been looking for. The house smelled and looked terrible, but as I dug a little deeper, I found that it was in pretty decent structural and mechanical condition. New PVC plumbing throughout, newish HVAC system and electrical. Fast forward 2.5 months and $20K in rehab & holding costs, I have a house that is worth around $80K and renting for $1,100 a month. I am going to start the refinance stage this week. I'll keep everyone posted as to how that goes.
Here are a few Before & After Pics.
Added 900 SF of sod.
New CabinetsTook out load bearing wall and replaced with structural beam.Laundry/Linen ClosetBathroom
Looks awesome! Great transformation....looks like you scored an awesome deal!
What exactly is BRRRR? I have had trouble figuring it out between looking up related discussions on here, as well as other research.
However, great job on the house! Glad to hear everything worked out well.
Ah yes of course. Thank you for the direction!
Nice work @Cory LaChance !
Those are some excellent numbers, way to go!
Looks awesome! Congrats!
It's bee a while since I've posted on my deal. Well, this deal is done and I am happy to report that the final 2 "R's" (Refinance & Repeat) are complete.
I was able to refinance the property up to the price of purchase + repairs. I also had to prove the cost of repairs, which was easy because I used the House Flipping Spreadsheet and kept very accurate expense records. I bought the property and did the remodel with all of my own money, so the mortgage company would only let me get what I had in the property. I could have waited 1 year for an 80% LTV mortgage, but I didn't have time to wait a year.
Refinance Amount: $50,126
Refinance Costs: $2,150
Cash in the Bank: $47,976
The new appraised value: $77,500!!
That's $27,374 in equity.
I am currently renting this property out for $1,100 a month. This will cash flow around $275 per month using the 50% rule. I think 50% is a little high due to the fact that the house is completely remodeled, but it's a conservative number.
I just closed this refi this last week and am already under contract for my next BRRRR property. I'll post on it when I close.
I am happy to answer any question you may have, just ask!
Man, way to go @Cory LaChance
We got our first sfr under our belt recently, it was more of a turnkey that we found but has some nice returns. I want to do the BRRRR strategy on our next deal as it is a good way to some tremendous returns.
Did you have any construction or rehab experience before this?
Did you use a GC or did you direct the entire project?
Awesome job man!
@Cory LaChance way to go, bud!!
I have some questions for you.
1. Where did you go for loan?
2. Did you have established relationship with lender when you got the loan?
3. What rates and terms?
4. I thought you would need to wait for 80% LTV in order to get the refi done...can you explain a little more on the process?
5. Do you have any of your 10 conventional loans used or are you strictly purchasing with cash?
Thanks so much, and I can't wait to hear how the next BRRRR turns out!
@Jordan Decuir Thank you for the compliments. I do have a little bit of construction experience from working part time during college for a GC. I did most of the work myself during the weekends and after work. I subbed out the load bearing wall, all the tile work, & the sheetrock. Everything else I did myself with a helper.
1. Where did you go for loan? At a local bank in Lake Jackson.
2. Did you have established relationship with lender when you got the loan? I have a personal relationship with the VP of commercial lending. Although this is a conventional mortgage refinance, this could have been done at any mortgage lending service.
3. What rates and terms? 30 years, 4.25%
4. I thought you would need to wait for 80% LTV in order to get the refi done...can you explain a little more on the process? What I was told is that I could refi up to the purchase price + the rehab costs + the holding costs up to 80% of the newly appraised value. Or, I could have waited 1 year and pull 75% of the appraised value regardless of how much I have in the property. I think this was because I had no lien on the property and it was viewed as a "cash out" refinance. Had I used hard money or private lending, I could have refinanced just what I owed other parties.
5. Do you have any of your 10 conventional loans used or are you strictly purchasing with cash? This is my first investment property. I used my personal cash to purchase and rehab the property. So, I haven't crossed the 10 loan limit yet. This will be my 2nd mortgage including my personal residence.
I hope that answers your questions.
@Cory LaChance Awesome! Looks like it went phenomenally for you Congrats!! Did you use am agent or contact the seller's directly? You said the remodel took ~2.5 months, when did you start putting up ads for a renter?
@Brandon Price Thank you for the compliments. This property was a fsbo that just had a sign in the yard. I found it by driving the neighborhood looking for deals. As for advertising. My area has local realtor who does a great job running a real estate Facebook page to list rentals. I didn't list it until I was fully done with the remodel. I showed it a couple times to some other folks before finishing and found out that people can't really see what the end result will be and tend to shy away if there's any construction going on. Once I had it listed, it only took 1 week and 3 prospects to find a qualified tenant. I did my background check through smart move.
Great post- thanks for sharing all this info. It's great seeing success stories out of Brazoria!
Thanks, @Luis Regla ! I still have that property. I have since put a new roof and an AC unit. If I had to do it again I would have replaced those items during the rehab. Lesson learned...
I have used the BRRRR strategy on 3 other deals and have since opened a line of credit with a local bank am working to acquire higher end properties. This past year has been very exciting!
That's great! 3 more deals in one year? Did you find those just driving around as well?
2 were listed on the MLS and 1 was a friend of a friend whose grandmother had passed away. 1 other that I bought conventionally - 25% down and funded the remodel with my own cash. I have 5 properties total now. My goal is to do at least 4 a year for 5 more years and go full time.
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