Just Completed My First BRRRR and made $15k!!!
This month I successfully completed my first BRRRR project, and want to thank BP because until recently I've never heard the term BRRRR. We purchased a house in Charlotte, NC just over 2 years ago (November 2014) for $35,000 in cash - $15,000 down with the other $20,000 from a private lender. The property didn't need much, but we repaired the sub-floor in the master bath, HVAC / duct work, replaced some appliances & the rest was cosmetic work. All of the repairs were handled as they came up and actually paid for with rent proceeds. We rented it right away for $595, and after loan payment & expenses our net cashed flow was just over $200 per month. The house recently appraised for $70,000 and we closed earlier this month on lucky Friday the 13th, pulling out $52,500 in equity. After paying off our private loan, and anticipating our closing date we were able to get our next house under contract exactly one week later on the 20th! Here are the numbers below:
$52,500 Cash from refinance
- $6,000 closing costs ($3,000 from original purchase and $3,000 from refi)
- $16,500 private loan balance
- $15,000 initial cash investment
= $15,000 extra to reinvest!!!
We were able to double our original investment amount and will hopefully be able to close on 2 properties and continue to repeat the process. The best part is that the house we are buying next will be almost fully funded by the first. We got it under contract for $78,500, and are putting 20% down ($15,700). With another $3,000 in closing costs, we will be all in at $18,700 and $15,000 of that came from house #1.
Thanks BP for all the inspiration, I would love to hear about other people's BRRRR success stories!!!