First Deal DONE! - Miami SFH - BRRRR - Before & After Pics!!
Hi BP and Miami BP,
I've really got to rep Miami because I don't feel that we here in South Florida put our successes out as much as we should. I have successfully completed my first BRRRR and I have learned so much.
For starters I just wanted to thank the entire BP community for the invaluable help that has come my way in the form of the forums, local meetups and especially the podcasts. I can’t imagine how I would have done it without the knowledge and free resources that was made available here.
6 months ago I closed on the my first deal. In order to find it I used a combination of direct mail and bandit signs which I have to say still work plenty well regardless of the new move towards online marketing but that is another story. I want to let everyone know that even with 3 kids (two of which are under 3) IT IS STILL POSSIBLE IF YOU WANT IT BAD ENOUGH. I didn’t have a large marketing budget, or any budget for that matter, so in order to send out the direct mailers I bought a list and put together 2000 yellow letters by buying the paper and envelopes in bulk at Walmart and then spending the next couple of weeks every night from midnight to 2am, after the kids were sleeping, just folding and stamping them to save money. For Bandit signs I ran around on the weekends for a month at 2am until about 5 am putting them up on every corner in my target area. Was it tiring? Of course, especially while having a regular 9-5 to get up and go to every day but I was committed and I still am to my goal of creating a rental portfolio that can help me eventually achieve financial freedom.
So lets get to it.
I purchased a small 625 sqft SFH house in Liberty City. Now I know that those of you who are familiar with the area will say that is a very rough area and you would be right. However, having lived in an area similar to this previously, I felt confident that I could avoid most of the pitfalls of investing in a C class neighborhood as long as I stayed somewhat active in its management and check ins. I realize that this strategy is not for everyone but I think everyone needs to assess their own strategies and capabilities before simply saying something is or is not a viable option.
Here are the before and after pictures exterior pictures:
BEFORE:
As you can see the exterior definitely needed a good bit of work. I wasn’t even sure it was a house when I first saw it but it had potential and in this market I feel that you are definitely creating deals more so than just finding them.
AFTER:
The inside was pretty rough too but my contractor was definitely able to give it a great turnaround.
BEFORE
AFTER:
Lessons Learned:
1. JUST GET STARTED!!!
2. JUST GET STARTED!!! Listen no amount of analysis, reading in the forums, or talking will get you into the game. Just taking the first step and doing something is without a doubt the most important aspect of this entire business.
3. Things will go wrong. I am not a contractor nor do I have any plans on becoming one. In the process of doing this BRRRR I had to deal with a broken water supply line at 6 am, a roofing contractor that didn't do a good job and left my roof leaking in various spots, and a call from my new tenants saying that the house was flooding because apparently, as we found out later, the plumber didn't weld the copper supply lines to the shower valve correctly and water was coming out from the wall. But guess what? ITS ALL FIXABLE! It's never the end of the world and I am so glad I got to experience these problems now so as to accustom myself to the fact that this IS THE BUSINESS!
4. JUST GET STARTED!!! This is my very first deal and my first BRRRR. It is cashflowing but I wouldn't necessarily consider it a home run. But I now have the following things that I cannot even put a monetary value as a result of doing it:
- A good and reliable contractor who is ready to help me grow my business and work on future projects.
- An electrician, who I met AS A RESULT of the my contractor.
- A great handyman and gardener, who I met, AS A RESULT of my tenants.
- A fairly thorough working knowledge of how to replace a roof, run plumbing, electrical, hang drywall, lay tile, and the overall costs associated with the replacement and repair of all these things. To me I count those things as probably more important than the actual deal itself
So here are the numbers:
Purchase price: 70K
Renovation costs: 26K (I originally estimated 15K hahaha I wish)
Closing costs: 2K
All in cost of 98K.
Currently rented: 1200 per month.
The bank appraisal with my local bank just came back at 134K and with a LTV of 75% I am eligible to refinance out 101K on the total deal.
I am only refinancing 90K which will leave my all in costs at approx 8K on the deal.
After PITI and reserves for maintenance, capex, vacancy, and management I will cash flow approx 200 a month with a 23% CoC return!
So for all my Miami and SF investors there definitely are deals out here all I have to say is I'm here and I hoping that this inspires you to not only get started but to hopefully seek me out so we can do business together! I'm not a one dimensional investor whether its funding, deal finding, renovations or anything else I'm always eager to learn. So hit me up and lets make sure SF gets its fair share of success stories!
@Account Closed