My first ever BRRRR - Milwaukee, WI

3 Replies

Investment Info:

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

Purchase price: $84,400
Cash invested: $17,000

MLS property: (Duplex) 4 bed, 2 bath, 1,958 sqft
List price: $110,000
Initial closing: Jan. 21, 2021
3.125% (no points), 25% down (21K for down payment + 3K for closing costs)
Sale price: $84,400
Rehab: $34,000 (20K for upper, 14k for lower). Rehab took 7.5 months.
ARV: $155,000
Refinance closing: Oct. 22, 2021
3.875% (1.93 points), 70% LTV ($4,300 closing costs)
Cash-out: $38,000
Monthly Rent: $2,150 (lower: $1,000; upper: $1,150). Upper was rented out Oct. 1, lower lease has been signed to start Nov. 1
Principal and interest: $827
Monthly Property Management: $215
Reserves (3% CapEx, 7% Maintenance [$75/door/mo]): $215
5% vacancy: $107
Monthly Net Income: $786
Cash on cash return: 36.64%
Some more details... I initially offered 90K, and they countered with 96K, which I accepted. After the inspection, we discovered the roof will need to be replaced in the next 3-5 years and we asked for the cost of the roof to be deducted (12K), which they accepted. The previous owner hadn’t taken care of the upper unit at all and had been renting it out for $500/mo. When we took it over, we gutted the kitchen and bathroom (gutted = new floor, new cabinets, new appliances, new electrical and had to repair some subfloor from a leak we found). The downstairs’ kitchen needed new flooring and we had to redo everything in the bathroom besides the floor (has a classic, multicolored penny tile that was rebuffed and looks great). We painted all the walls in both units and sanded/painted the stairs connecting the units.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

I worked with Shelly Thompson realtor in Milwaukee and my property manager, Structure Property Management.

Promotion
Marko Rubel
ATTENTION INVESTORS
Get Deals 100% Funded – No Credit, No Banks, No Job Verification
New Unlimited Funding® program for investors: low-interest, without banks or shark lenders.
Check availability

Free eBook from BiggerPockets!

Ultimate Beginner's Guide Book Cover

Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!

  • Actionable advice for getting started,
  • Discover the 10 Most Lucrative Real Estate Niches,
  • Learn how to get started with or without money,
  • Explore Real-Life Strategies for Building Wealth,
  • And a LOT more.

We hate spam just as much as you