My First Successful BRRRR in St. Louis MO
Investment Info:
Single-family residence buy & hold investment in St. Louis.
Purchase price: $61,700
Cash invested: $6,000
After failing miserably on my first deal and losing thousands of dollars, my second deal came relatively easy and was a quick win!
What made you interested in investing in this type of deal?
I get really excited about any deal that I can BRRRR and pull most of my money back out with a refinance. It makes it a no brainier to invest in the deal and add to my portfolio since it takes up very little if any of my working capital.
How did you find this deal and how did you negotiate it?
I found this deal on the MLS. This was a Freddie Mac foreclosure. They even attempted to rehab this home but the finishes on it were done rather sloppy. They came out on the market overpriced initially and I saw it when the list price was dropped to $59,900. At that point multiple investors were interested in it and I had to win a highest and best multiple offer situation. I was able to get the listing agent to help advise me on what offer price would win the deal.
How did you finance this deal?
I used a local commercial bank to finance most of the deal 80% of the purchase price and 100% of the rehab costs. I used a HELOC to come up with the 20% down I needed. After the rehab was complete and the property was rented (about 60 days after purchase) I refinanced with the same commercial bank. The appraisal came back at $99,000 and I was able to pull all of my money back out and purchase another property with the same bank.
How did you add value to the deal?
I hired a contractor to do a really light rehab to the home. Deep cleaned the house. Replaced old light fixtures and door hardware. New toilets. New bathroom hardware and mirrors. Re-grouted kitchen floors.
Painted the basement and repaired a leaking crack and some damaged drywall. Power washed the house, cleaned the gutters, cleaned up the yard.
What was the outcome?
The rehab was really easy and was completed in about 30 days. I listed it for rent on Zillow and it had a ton of interest and rented really quick. I had a good renter in there within 30 days.
Lessons learned? Challenges?
I learned that great deals are out there and even on the MLS. I needed this one after getting beat up on my first deal. This gave me a lot of confidence and momentum to keep building my rental portfolio in pursuit of freedom from my corporate job.
