My step by step BRRRR

114 Replies

I am going to document my current BRRRR project in Jacksonville, Fl.

It is 3/1 and 1100 sq ft detached garage 

I bought the house on Thursday for 36k.  See pics below.

My goal is have it apprise for 75k and refi LTV of 75% = 56k budget. I may not be able to get all my money, but it will be close.

I spoke to a lender a while ago that said, if it was a cash purchase and a major reno, there would be no seasoning.

Rent 800.  It will go under property management 

It needs:

A/C  - Hot-water heater

Kitchen

Appliances

Floor

PAINT - the current colors are amazing. 

Bathroom  It is in good shape, but there is a soft spot, that may be an indication of a bigger issue

Roof is new 

I only want to spend 20k on the reno, I can find low cost materials.  The labor may do me in.

I did not take a photo of the front of the house.  I will add it to the next post.

Previous owner started the trash out without using a dumpster

Notice the closet, ceiling and wall are all B L U E !!

In defense of the prior painter, the University of Florida's colors are....

Needs paint, but looks pretty good.  A brown bathroom is never a good idea.

Upper right corner is the soft spot.

Living room 

Master

Kitchen countertop matches the backsplash 

So, the city cited me for the trash, I have 15 days to clean it up.  I have a dumpster arriving on Monday and some kid labor to clean it.

Congrats, and I’m excited to follow along! Looks like a fun project. Between the paint jobs and the backsplash, I guess you could say the previous owners were not afraid to make bold design decisions... 

Well said, there were a few other design elements that did not make the post.  lol

I am excited to get this one going.  My contractor is going out there on Monday.


Originally posted by @Jen R. :

Congrats, and I’m excited to follow along! Looks like a fun project. Between the paint jobs and the backsplash, I guess you could say the previous owners were not afraid to make bold design decisions... 

Looking forward to seeing how this goes for you, thanks for sharing. That paint job is pretty epic. One thing, is that mold in the corner of the living room?

Originally posted by @Brook Rieman :

Looking forward to seeing how this goes for you, thanks for sharing. That paint job is pretty epic. One thing, is that mold in the corner of the living room?

 Need to investigate.  I think it is dirt.  I know the roof was recently replaced.

super exciting, congrats...

watch out for remaining open and pulling permits..

Duval, border counties, like never before are targeting dumpsters, we buy houses signs, dinging for anything, door permits, etc....

I "think" its because of insurance companies, and past hurricanes, the county is hunting and penalizing hard like never before......aggressively  against investors..

the city turns a blind eye to children not in school during the day, rather than enforcing, but is looking for rehab investors to penalize and enforce.....maybe thats where the $$ is..

I like your challenge to get the reno done for under $20k. It is a great looking property for a quick turn.  Can’t wait to see how you bring it back to calm, in exchange those crazy colors. 

Congrats Lesley,

I am new to BP and have been trying to read more about the BRRRR process. Please help me with a couple of basic questions...how long do you have to wait before you are able to refinance and pull cash out? Also, your goal of 20k for reno... how did you reach that number and would you use your own cash for that or use some form of a loan?

Thanks

I received a bright yellow tag from the city about the trash and that I have 15 days to clean it up.  I am ok with the city trying to clean up its act on permits, dumpsters, etc.  Not an advocate of big gov, just do their jobs efficiently and enforce the rules evenly.     

Originally posted by @Matt Berklacy :

super exciting, congrats...

watch out for remaining open and pulling permits..

Duval, border counties, like never before are targeting dumpsters, we buy houses signs, dinging for anything, door permits, etc....

I "think" its because of insurance companies, and past hurricanes, the county is hunting and penalizing hard like never before......aggressively  against investors..

the city turns a blind eye to children not in school during the day, rather than enforcing, but is looking for rehab investors to penalize and enforce.....maybe thats where the $$ is..

Originally posted by @Tonya Presley :

Congrats Lesley,

I am new to BP and have been trying to read more about the BRRRR process. Please help me with a couple of basic questions...how long do you have to wait before you are able to refinance and pull cash out? Also, your goal of 20k for reno... how did you reach that number and would you use your own cash for that or use some form of a loan?

Thanks

1. The refi hold term will depend. You will need to check with the lenders. If you are using any conventional product it will be a 6 moth seasoning. Many portfolio loans will remove the seasoning if you bought the property with cash and can demonstrate that you have materially improved the property. With hat said if you paid cash and just want to get your purchase price out then, you have more options, but that is not really a BRRR,

2. I did this backwards, more for explanation purposes. I took my ARV and reduced it by 25% for the future loan and arrived at a 20k budget. My estimate is back of the napkin and could be completely off. Given the spread between my purchase and ARV, I will end up in a fine spot. My contractor is going to the house next week. I do not need a roof, but will need A/C and a kitchen, often the most expensive pieces.

3.  Cash is king, when making purchases, reno is fine for credit.  I actually have a lowes/Home depot card that offer no interest on purchase of 300 and up.  Materials will come from a big box retailer.  Labor will be on a credit card, since most vendors want to get paid online.  The appliances will most likely be used and will be paid in cash.    

Materials is a great place to control costs.  I buy the materials on my own and pay the contractors for the labor.  The big box stores will deliver.   

Flooring can get expensive and heavy.  I found this one for $.79 @1100 = 1015 with tax and delivery.  They get 79 to deliver and will bring it into the house.  This is a huge time saver.  

Home Depot floor

Update.... 

Change of floor tile.  

New floor Lowes Floor

I have changed out he floor the new one is .49 per square and they are 1x2.  Since they are larger, there will be fewer tiles to install.

I do not think that Depot will bring the tiles inside.  

Lowes will bring the tiles brought into the house.   

good Job Leslie! I feel like you are headed the right direction. This is definitely doable. Knock out the stuff that has to be completed by contractors. If you start to get a little low in funds.... There is always a little sweat equity to make up the difference! I'm excited to see your progress.

Free eBook from BiggerPockets!

Ultimate Beginner's Guide Book Cover

Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!

  • Actionable advice for getting started,
  • Discover the 10 Most Lucrative Real Estate Niches,
  • Learn how to get started with or without money,
  • Explore Real-Life Strategies for Building Wealth,
  • And a LOT more.

We hate spam just as much as you

Create Lasting Wealth Through Real Estate

Join the millions of people achieving financial freedom through the power of real estate investing

Start here