Let me go ahead and let you know my BRRR has a lot of moving parts and might be a little mind blowing. Ok here goes, I purchase two buildings side by side. Building #1 is a furniture store and building #2 is a warehouse. Total purchase price is for $475,000.00 seller to pay my closing cost and prepaids. Seller takes a 2nd for 30% of the purchase price and bank takes a 1st for the other 70%. The seller of the building is also the owner of the furniture store. I negotiate a leaseback with the owner of the furniture store for a 2 year lease @ $2,000.00 per month all due at closing. This is right at 08/09 all hell is breaking lose in the economy and I was not sure the furniture store would be able to make it so I wanted my rent up front.

I told you this has a lot of moving parts. So at closing I get a check for $48,000.00! I take the $48,000.00 and another $75,000.00 (401k loan and cash) and build out building #2 to climate controlled self storage (I have other self storage in the area before I did this deal) and a small office. Three or so years goes by and I get a contract for another self storage facility in Chattanooga Tennessee for $950,000.00. The thing was I did not have any money for the down payment! So what I ended up doing is pledging my original buildings that I bought as the down payment for my new self storage facility. The trick was that my buildings would have to appraise for somewhere around $790,000.00. Luck have it my original buildings ended up appraising for $9000,000.00! It don't stop here. Before I closed on my new self storage facility in Chattanooga I called my 2nd note holder (the seller of the buildings) on the original building I bought and told him that (keep in mind I was going to have to pay him off no matter what) I came into some money and would he like to take a discount on his note to be paid off early. He was more than willing to take 15% off which saved me around $21,000.00. 

PART 2 OF THE POST IS COMING SOON!