BRRRR Deal - Edmond, OK

6 Replies

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $85,000
Cash invested: $12,000

I bought this single family home 4/30/2019 and unfortunately didn't begin the renovations until 6/1/2019. The rehab was completed in mid July and I was able to get tenants in place 8/1/2019. The home is rented for $1,050 and my monthly principal, interest, and taxes will be around $700. Monthly cash flow of $350/month, obviously a portion of that will be used for repairs, maintenance, and capex. Not a homerun by any means but it it a solid rental now and my first fully executed BRRRR deal.

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

Wholesaler. Multiple offers, but mine was the only "cash" offer so I got it.

How did you finance this deal?

I purchased the property with funds from a private lender and was able to get the property appraised for $117,000 after the rehab was finished. My lender then let me refinance at 75% of that ($87,300) at 5.25% fixed for 30 years.

How did you add value to the deal?

Full interior rehab.

What was the outcome?

Rented the property for $1,050.

Lessons learned? Challenges?

Don't put off things you know you need to get done related to the rehab. Time is money & worry.

@Chase Gibson looks like a solid investment. Unfortunate you weren't able to pull all your cash out as part of the refi. Is that what you intended or was the ARV just off the mark?

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Originally posted by @Priscilla Swantner:

@Chase Gibson looks like a solid investment. Unfortunate you weren't able to pull all your cash out as part of the refi. Is that what you intended or was the ARV just off the mark?

I knew getting all of my cash out was going to be a challenge, but I was happy to be able to get the full purchase price back out of the deal, and all that is left in it is some rehab costs. 

@Chase Gibson congratulations! Your first BRRRR doesn't have to be a home run. I suspect after expenses and reserves your cash flow will be pretty thin, but you have gained equity and most importantly, experience!

That is awesome that you were able to refinance immediately. Any tips on how you avoided the dreaded 6 month seasoning period?

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