BRRRR in Old Town, Maine

9 Replies

Investment Info:

Small multi-family (2-4 units) buy & hold investment.

Purchase price: $74,000
Cash invested: $15,000

Duplex in Old Town, Maine near the Old Town Mill. Off-market deal, using the BRRRR strategy. Took over a property about to go into foreclosure. Was filled with stuff and needed significant cleaning and remodel/repairs. Just appraised for $107,000, a little under projected but enough for a good deal.

What made you interested in investing in this type of deal?

Long term want to have buy and hold rentals but don't want to tie up too much cash into individual properties.

How did you find this deal and how did you negotiate it?

Off-market, no negotiation.

How did you finance this deal?

Took over a bad mortgage and house via that had gone south via quitclaim deed. Now in the process of refinancing.

How did you add value to the deal?

Cleaning, move-out, repairs and remodeling.

What was the outcome?

Got it rented. In the process of refinancing, should create about $20,000 in equity and have $300 in cash flow by the end of it.

Lessons learned? Challenges?

Too many to list... This is my first completed (nearly) deal. For starters, accidentally put washer and dryer in the lease but took the washer from the property, and property never had a dryer hook up in the first place. Scrambled on move-in day when the tenants informed me, immediately ordered at 120v small dryer from Walmart and found a washer to hook up. Took it all one step at a time and (somewhat) in stride!

Thanks, @Ed Emmons . Love the content you have been putting out on Facebook! 

@Cameron Tope In the process of refinancing. Current mortgage is 7.2%, not good! Looks like I can bring it down to 4.875%, and change from about 17yrs left on the note to 30yr. Lots of internal debate about that but decided I wanted the cash flow rather than faster equity pay down. 

@Greg Szymbor I definitely will be. I'm currently working on another BRRRR out of state too. I'm hoping once completing that and this one I'll have enough capital (75-100k) saved to do a full cash buy and rehab with my own money in the Bangor area.

Thanks, @Michael Picher

The refinance is finally completed! Took longer than expected but was able to refinance:

4.875% (bought down about 1 point)

$78,400

Appraised at $107,000

30yr

Total cash left in the deal from repairs/closing costs is about $9,000

Rent is $1850/month

PITI $710

Cashflow after expenses including 30% for CapEx, Maintenance & Vacancy = $206/month

Next steps: Trying to find a small credit union to do a low $ HELOC to pay for a boiler upgrade and trying to reduce insurance costs. Long term, looking to increase rents and start renting the attic by adding heating/cooling up there. Think rent could go up to $2,500 in 1-2 yrs making cashflow closer to $600/month

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