Second BRRRR, Kansas City, MO

35 Replies

Our Second BRRRR! We went over budget and finished later than planned but it's finally completed; enough to at least put on the market. Definitely learned a lot from this project. This was our first home that we won through a state foreclosure auction. There were huge delays because It was tagged as a dangerous building and we were never told prior to bidding. We were able to negotiate and get discount from the bank but we never knew the extent of the work involved. We also didn't know there was a swimming pool in the back that we ended up taking down. Moral of the story, always prepare for the worst. Keep numbers as tight as possible. We will now project numbers at 70%-75% ltv of arv not comps alone and keep a solid contract with specific dates with our contractor. The yard still needs a lot of work and the porch needs to be painted but we now have to wait for winter to pass. To the least we can now have it rented and refinance as soon as possible. As you might've noticed. The materials were similar. The goal is to have a self sustained system where we can manage to rehab multiple a month. That said, single family homes are fun but we are definitely going to move to multi families which are probably more efficient. Don't think we will hit our 5 home goal by eoy but definitely enjoying the learning experience and process to get there.

BEFORE

...We replaced the hvac system, the whole plumbing, some electrical, base boarded the whole house, replaced doors, painted everything, cleaned out and rehabbed the basement, tiled up 2000 st ft, removed over 1000sqft above ground pool, repaired the roof, re shaped the porch, sanded and prepped the bottom portion to put stone, plowed the dirt to put seeds, repainted the complete interior and complete exterior, and got appliances. ALSO, homeless came in and stripped the whole home with copper and most likely camped in it while it was uninhabited...

I will update the post with numbers as soon as possible.

 
AFTER


We appreciate all the comments and opinions!

Updated 27 days ago

Acquisition Date: 09/14/2019 Anticipated completion date: 10/14 - 10/30 Actual Completion Date and Market Date: 11/08/2019 Purchase Price: $72,859.02 Projected rehab costs $50,000.00 Actual Rehab Costs:$55,137.64 Projected all in costs $125,000.00 Total Costs including purchase price, closing costs and other costs:$134,676.16 Tenants pay utilities=$255.00 Projected Rent=$1450 CAP RATE BASIC$17,400 - $0 = $17,400 / $134,676.16 = 12.9% CAP RATE VACANCY AND USING MARKET VALUE Net Income =77% x 95% X $ 17,400 = 12,728.10 / 160,000 = 7.95% Cash on Cash ROI the same because there is no mortgage ROI $17,400 / $134,676.16 = 12.9% = 7.75 years COMPS in the area for 4 bed 2 bath are scattered ranging $150K-$180K which is why we are scared for the final appraisal. The best one we could find is $160,000 but we will expect the worst for $150,000 which wouldn't be terrible. However for the sake of the BRRRR strategy at 75% LTV we would return only $112,500. Using $160,000 as equity however would yield an ROE $17,400 / $25,323.84 = 68.71% We are out of pocket with initially $74,767.16 $60,000 Hard Loan at 1.5 simple interest

thank you! After the rehab we were told not to display for rent signs on the yard. It attracts those scoundrels you speak of 

Originally posted by @Anthony Shavies :

@Johny Omaga Congrats Johny, the rehab looks amazing!!!

Anybody have suggestions for dealing with “copper stealing scoundrels” security system? attack dogs? Etc?

*Kidding about the dogs

 

@Johny Omaga you guys did an amazing job. I like the detail on the stairs and the floating vanity in the bathroom. The whole house is great. I'm currently doing my first flip and I hope I can do as good of a job as you! Thanks for sharing

Thank you. There is a lot i was unable to do and we really pinched the penny with this one. We are not selling! we are renting then refinancing. Our only worry is that our comps were as close as the ones we projected otherwise we do not think we will be getting all our money back on this one. Stay tuned for the numbers i am working on them right now

As for the flooring, I will have to check with our books to see what they were called. Most of the materials were bought online. 

The stairs steps. Are you referring to the ones inside the home?

Originally posted by @Jennie W. :

@Johny Omaga

Looks so nice! I hope it sells for a great price. What’s the name/color of the flooring? Did u paint the stair steps?

We invest in KCMO too!

 

Thank you for your kind words. Still could have done a lot more but we didnt want run over our budget. Are you flipping in KC, MO??


Originally posted by @Matthew Ewald :

@Johny Omaga you guys did an amazing job. I like the detail on the stairs and the floating vanity in the bathroom. The whole house is great. I'm currently doing my first flip and I hope I can do as good of a job as you! Thanks for sharing

 

Acquisition Date: 09/14/2019

Anticipated completion date: 10/14 - 10/30

Actual Completion Date and Market Date: 11/08/2019

Purchase Price: $72,859.02

Projected rehab costs $50,000.00

Actual Rehab Costs:$55,137.64

Projected all in costs $125,000.00
Total Costs including purchase price, closing costs and other costs:$134,676.16


Tenants pay utilities=$255.00
Projected Rent=$1450

CAP RATE BASIC$17,400 - $0 = $17,400 / $134,676.16
= 12.9%

CAP RATE VACANCY AND USING MARKET VALUE

Net Income =77% x 95% X $

17,400

= 12,728.10 / 160,000 = 7.95%

Cash on Cash ROI the same because there is no mortgage

ROI $17,400 / $134,676.16 = 12.9% = 7.75 years


COMPS in the area for 4 bed 2 bath are scattered ranging $150K-$180K which is why we are scared for the final appraisal. The best one we could find is $160,000 but we will expect the worst for $150,000 which wouldn't be terrible. However for the sake of the BRRRR strategy at 75% LTV we would return only  $112,500. 

Using $160,000 as equity however would yield an 

ROE $17,400 / $25,323.84 = 68.71%



We are out of pocket with initially $74,767.16
$60,000 Hard Loan at 1.5 simple interest

We will update this once we get our appraisal for the refinance!Thanks for all the comments!Just added the numbers!

Originally posted by @Erik Stewart :

@Johny Omaga

Looks awesome! Would love to get all the numbers on the deal and hours of work you have into it! Keep it up!

 

@Johny Omaga wow it looks awesome! Currently looking for my next deal and planning to do a BRRRR also, so it's always nice to hear and see the good, bad and ugly. Cant wait to see the final numbers when they're in. I invest in this area also and also live close by. Great area for buy and holds!

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