First BRRR in Memphis - Did everything we weren't supposed to do
Hey y'all,
My wife and I have been hunting for our first property since March of this year. After hours of hunting the MLS, 100+ deals researched, and about a dozen offers in different states, we have our first property. We chose Memphis because of its rental population, price, and growth. My wife is in the military, so we'll be investing out of state at some point, so we figured we can take the risk now.
The Property
$34,000 after taxes and fees
3bd/2ba 1100sqft
Comps $65k - $75k | Rents $700 - $775
We found the property at Auction.com. We'd been looking for deals for a few weeks in certain areas, and finally pulled the trigger on this one. We created a map of zip codes in Memphis (and no-go areas), but still ended up purchasing in 38127. With no good way of checking on the property, we just walked the neighborhood via Google Maps, and decided that it could be something we could risk.
The photos from Google showed it occupied as of 2017, but the MLS stated that the property had been for sale for 12 years. So the data was a little wonky. We were hoping that the rehab would only come in at $20k, as long as there wasn't too much deferred repairs. Then, if we could refinance, we'd be able to take most of our money out. We definitely got a huge surprise when we went into the house.
The First Look
It was purchased at auction, so when we closed, we just got a good luck from the title company, and that was it. Thankfully, someone had already broken the lock in the back, so we didn't need to kick the door in. We were expecting it to be bad, but we weren't ready for what we saw.
There was stuff everywhere. Anything of value was gone, and everything else was clothing, food, documents, and furniture. And when I say anything of value, I mean the water heater was gone. The furnace was gone. The air conditioner was gone.Exposed wire had been snipped for bits of copper.
We learned later that we purchased the local party house, where kids would go to skip school. Also the spot where people would go in and sleep every now and then.
View of the kitchen
A view of the living room