First BRRRR Deal in Panama City
Investment Info:
Single-family residence buy & hold investment in Panama City.
Purchase price: $53,250
Cash invested: $850
This was my first BRRRR deal and I learned a ton along the way! I bought a hurricane damaged home here in Panama City with a low-down, seller financed note and leveraged a partnership for the rehab costs. In doing so I now have a solid rental property in my portfolio for almost nothing out of pocket!
What made you interested in investing in this type of deal?
This property is close to the Air Force base which is a big plus to be close to a population of potential tenants with good, stable income and a steady occupation. It also had low barriers to entry since I was able to negotiate a price low enough that would justify doing a full gut job renovation and bringing in a partner for that.
How did you find this deal and how did you negotiate it?
I found this deal through direct mail. I met the owner at the property within 15 minutes of receiving his call and began to build rapport with him. I asked if he would consider seller financing it if the numbers worked for him and if we put a balloon payment on the note. He agreed.
How did you finance this deal?
I financed this deal through the seller and used a partner to provide the low down payment and renovation costs.
How did you add value to the deal?
We did a full renovation on the property to force appreciation.
What was the outcome?
The outcome was a like-new home at the end of the renovation. Not everything went perfect, but it went well considering it was my first time through the process. I built a relationship with a local bank who does portfolio loans, and borrowed 80% LTV based on the new appraised value. In doing so I was able to pull out the full cost of acquisition, renovation, and everything else - plus a return to my partner for investing in the deal with me. Now I own the property free and clear as a rental.
Lessons learned? Challenges?
Challenges were the administration for all the moving parts of the project while working full time and getting the property reappraised when the first "drive-by" appraisal came in low. I learned a lot of diligence goes into this but built good relationships along the way and am working my second deal with the portfolio lender and am looking at future deals with my partner from this project.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
I worked with a lot of people on this project. My partners of course being the bulk of who I worked with. Local real estate agents helped me with comps in determining ARV and a local lender provided the cash out refinance on the property. I also found good inspectors, surveyors, appraisers as a result of this deal.