Just completed my 1st BRRRR in VA
Hey BP! I just closed on the Refinance portion of my first ever deal, a BRRRR. I guess once I "Repeat" then I would have actually completed the BRRRR process. For reference, I've listened to the podcast for about a year. In Summer of 2018, my wife and I took out a HELOC on our primary home in Richmond, VA, as it had appreciated in value greatly in just our two years of ownership. We opened the HELOC and sat on it so we'd have it ready when the time came, and in January 2019, got a phone call from a mutual friend who is a wholesaler in the area. We had met a few months prior, and he called to let me know he had a house under contract that was in the ballpark of my HELOC amount, and thought it may be a perfect first deal for me.
The process actually went relatively smoothly, except for having to fire a contractor. Essentially, he oversold his ability to finish the attic, was doing a poor job on drywall, and I had to fire him and hire a new guy. This swap in contractors cost me an additional $4,000. The house was a 900 sq ft single family with 2 bed, 1 bath and a walk-up unfinished attic. The main work done: refinished the hardwood floors, painted throughout, and finished the attic. Now it's a 3 bed, 1 bath, and 1250 sq ft.
Here are some numbers:
Purchase Price: $61,000 (paid for using HELOC)
Rehab Cost: $17,000 (paid with personal savings)
All-in Price: $78,000
ARV: $105,000 (based on appraisal from refinance process)
Rent: $1,000/month (Lease signed mid-project)
At the end of it all, I had to leave about $4,000 in the deal. The ARV wasn't quite high enough to get all my money back out when I refinanced, the fire/re-hire of a contractor hurt me a little, and the closing costs were higher than anticipated. But, for my first deal I'm thrilled, just got my my money back out, and will be looking for deal #2!
Some before pics:
And some after pics:
