First BRRRR, hard money loan, wholesale deal in Denver
Hi all. I’m a real estate investor in Denver with many years of house flipping and Airbnb experience behind me. I generally stay solo and try to use bank money and slowly build my real estate portfolio. I currently own four houses in Colorado. I just finished a new build that sold and have purchased another lot and am in the design and city submittal process for a new build. I have a downtown Airbnb rental, a mountain rental and my family’s property.
I am about to purchase my first property with hard money from a wholesaler and remodel it to hold as a 30day+ Furnished rental. It’s a historic 1887 Victorian two story house in downtown Denver that has really never been remodeled. It has been vacant for years and looks very original and dirty on the inside. Just how I like them, not livable and overwhelming for most. I’m a sucker for historic properties so I get a thrill out of working on such a vintage house. It was sent to me by a wholesaler and the charming curb appeal got me. Next door to my Airbnb rental is a property owned by a hard money lender who is a very nice guy. He agreed to do a loan with using a second mortgage on my rental as my part of the money in.
I plan to have the new house remodeled, rented and refinanced within 6 months. Then the original loans get paid back and I have a fully remodeled rental property with no cash outlay and appreciating nicely in Denver. The monthly income should do pretty well and get me a few thousand over the monthly mortgage payment. Is the seasoning time a concern for some mortgage lenders? Are there ones out there that don’t care about that?
Purchase price is $488,000, renovation and holding costs will be $100,000. ARV with using some great recent comps will be $725,000.
My wife loves to decorate a house and is quite good at it. We have most all of the furniture to go in it from other rentals. Then I will list it on Airbnb for 30+ days and hopefully get $5000 a month. Are there other big furnished monthly rental sites to consider?
Then do it again! Looking forward to gaining the knowledge and experience of working with the hard money loan and the wholesaler. I was surprised that the hard money loan is not that much higher for what a bank mortgage would cost. If I can get it done in 5-6 months, I will only be paying at most $10,000 more to go the hard money route. For me, if I can get the deal done and quick, that’s worth it. And I’ll make that back in appreciation in a few months of owning it. Better than sitting on the couch! Rise and grind!
John