Finally closed my first deal, thanks BP

6 Replies

Hi all! I recently landed and closed on my first deal after a year of listening to BP and preparing to take the plunge. I was actually still a few months early based on my plan but I was offered a deal and found a way to make it happen. I purchased the home with private money which funded all but 1k of the purchase price. The home was purchased for 141k with an ARV of 189k with rehab costs of 10k. Since the lender loaned all but 1k of the purchase I am total out of pocket including holding cost for the first month of about 14k. So 14+141=152k all in and the home will rent for $1650. After I refinance and pay off the private lender I have about $900 a month in PITI so a great spread between the two. The home is a 3/2 and over 1600 sq ft with a .70 acre lot. Rehab is mostly cosmetic included total paint throughout which my wife and I have already done including patching multiple holes in the walls, replacing some baseboards, caulking and light work. I am replacing carpet in all bedrooms and pulled the old carpet out myself to save money. The biggest cost is doing Vinyl siding to cover up the 1980s wood siding that is deteriorating and is an ugly brown. The home is in the sweet spot in my city and in the best school district. It is less than 3 miles to lowes, Home Depot, shopping and a hospital. The rest of the homes in the neighborhood are all updated and with nice landscaping. It truly was the home holding the neighborhood back and will now be in line with everyone else. The home across the street is listed at 209k but with a larger sq ft. The majority of the rehab cost is on a credit card so almost no cash was used on this deal. How did I do? Thanks BP for giving me the tools to chase my dream.

@Daniel Rutledge will you be getting most or all of your money out on the refi? Do you have a timeline for doing so? I've heard many say 12 months are required. If so, are you cash flowing some even with the short term private lender and credit card? sounds like a good BRRRR. Many look for higher margins, but in today's market you nailed it with a good one. The purchase and rental price for the size house sounds like my market. Most homes that size are closer to $200k with slim margins but the light rehab dated ones in otherwise nice neighborhoods are the hidden gems when the price is right. What was the original asking price?
Originally posted by @Russell Holmes :
@Daniel Rutledge will you be getting most or all of your money out on the refi? Do you have a timeline for doing so? I've heard many say 12 months are required. If so, are you cash flowing some even with the short term private lender and credit card? sounds like a good BRRRR. Many look for higher margins, but in today's market you nailed it with a good one. The purchase and rental price for the size house sounds like my market. Most homes that size are closer to $200k with slim margins but the light rehab dated ones in otherwise nice neighborhoods are the hidden gems when the price is right. What was the original asking price?

Hi Russell, I will refinance at either 3 months with a private asset based company called Corevest or at 6 months with my normal lender but I am not sure which one I will do for this home. Doing it with Corevest is more expensive but can be done sooner and is based on the asset. It will also allow me to keep the debt off of my credit report so it will not hurt my DTI for other deals as I need to have the income seasoned for 12 months to count it for a conventional mortgage. I will pull enough out to pay off the private lender but will still have some money in the deal but that doesn't bother me as I will still have good equity and cash flow. While paying the private lender I will basically be breaking even but not losing anything. If I can get a tenant in soon I will get a full month of rent prior to making a payment to the lender so that's nice.

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