My 3rd successful long distance BRRRR in Huntsville!

27 Replies

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $140,000
Cash invested: $42,000

Contributors:
@Matthew McDermott , @Jason Grey

One of the rare classic BRRR deals in Huntsville Class B neighborhood. Purchased it for 140K and although the house was in decent shape all the aspects of the house needed to be retouched making it a huge project. This is my 3rd long distance brrrr and the most satisfying given that its almost impossible to find BRRRR deals in Huntsville right now.

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

Great location (Class B), great value add opportunity and a rare BRRR opportunity in a class B area in Huntsville. This was a 5/2.5 house (3 bed/2 bad main floor and 2 bed and 0.5 bath in basement) 1650 Sq footage house which seemed odd and based on initial walk through we realized that the basement sq footage was not included and the real sq footage was 2450. And based on this Sq footage the ARV changed dramatically.

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

Found this off market through one of my local contact. The seller asked 142K and I negotiated to 140K and did not negotiate much since I thought there was a huge margin of safety at 140K itself.

How did you finance this deal?

Since this is a BRRRR deal I paid all cash.

How did you add value to the deal?

Did a complete kitchen upgrade with granite CT, new appliances, cabinet repaint. Converted the 0.5 bath in basement to a full bath so that 2 bedrooms downstairs will have a full bath access. Replaced flooring for the entire house with LVP. Opened up the wall between living room, kitchen and dinning area to make it more open. Replace the wooden plank walls in the 3 bedrooms with sheetrock to give it a more modern look. Painted the entire houses. Replaced the roof and lot more!

What was the outcome?

The rehab was completed in 3.5 months and my PM was able to rent it out for 1900 per month and currently in refi process, I am positive that this will appraise for at least 265k and I can get almost if not all my cash out plus a great house in a great location cashflowing at 350-500 per month.

Lessons learned? Challenges?

There are many most important ones are to make sure have checks and balances at each level. My PM had no skin in the game and since he was going to manage the property I asked him to check and made sure that there were no functional issues. Improvement wise, I think I was a little lazy in finding materials related deals around, luckily another investor friend was having a huge rehab as well and we teamed up to buy bulk LVP at a great discount.

Congrats man! Bless you for being able to do it long distance. I need to have way more in-person control than that to even feel comfortable, so good on you. Hope everything pans out with your appraisal, refi, and operations! Keep em' comin!

@Michael S.

Thanks! The property is in 35811

Originally posted by @Michael S.:

@Gorden Lopes

congrats on finding a great deal and completing a BRRRR with it; what zip code is the property located in? 35803?

 

@Gorden Lopes

The place looks great! I think it's great that you realized that you were able to add square footage to the property. It proves that there are still good deals out there. I also like the idea that you partnered with someone for supplies. That's a good idea.

I'm curious how far away you live from this project? How did you select the local labor and supplies. Do you have local contacts to give you recommendations?

Maybe around 1300-1450 range. Why do you ask that though? I mean do you want to know if could have rented it as is? I think could but then I could not have gotten the forced appreciation. Hope that answers your question.

Originally posted by @Carlos Ptriawan :

my question is what's the *actual* rent price if you don't put the rehab ? is it $1900, $1500 or even unrentable ? 

 

@mary Ann E Wdell
I stay in Bay Area California and I have not seen this property my self. So all the buying and rehab management was done completely remote! :) For material, I used local vendors for eg flooring, roof shingles etc were all purchased locally. There were few items like fans and lights that I purchased through amazon rest all was from Home Depot and other local suppliers.

Originally posted by @Mary Ann E Wedell :

@Gorden Lopes

The place looks great! I think it's great that you realized that you were able to add square footage to the property. It proves that there are still good deals out there. I also like the idea that you partnered with someone for supplies. That's a good idea.

I'm curious how far away you live from this project? How did you select the local labor and supplies. Do you have local contacts to give you recommendations?

 

Yes, its a modest rehab since I was not flipping it, I wanted to rehab it enough to make sure I hit my target ARV. Rental increase was not my main goal for the rehab, my main goal was to increase the ARV.

Originally posted by @Carlos Ptriawan :

Okay so basically it's 1.0 rent ratio to achieve 1.1 rent ratio, from the rental perspective the rehab looks modest.  

 

Congratulations. Good Job. How to find whether particular zip code or location is B or A or C location?

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