2nd Fayetteville, NC BRRRR in the books!

BRRRR - Buy, Rehab, Rent, Refinance, Repeat
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2nd Fayetteville, NC BRRRR in the books!

Adam R Gebner
Rental Property Investor · Tacoma, WA · Member since 2019 · 6 posts · 13 votes

My wife and I just completed our second BRRRR on our fourth rental property: a SFH in Fayetteville, NC.

Here are the details:

Purchase Price: ~$55,000

Rehab: ~$10,000

Rent: $925

Appraised ARV: $125,000 

Cash Out Refi: ~$90,000

We are very pleased with our improved performance from the 1st to the 2nd BRRRR...excited to redeploy these dollars on another SFH BRRRR!

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Don-Carlos Moniz
Real Estate Agent · Fayetteville, NC · Member since 2020 · 108 posts · 108 votes
5y

@Adam R Gebner, that is great. I just started getting active on BP and it is awesome to see someone in my local area completing a project like that. Good luck on the next one.

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  • Brady Potts
    Developer · Missoula, MT · Member since 2015 · 60 posts · 28 votes
    5y

    Congrats! That sounds like a sweet deal. We are currently in our first BRRRR down there, smack in the middle of rehab.

    What were some of the key takeaways you learned on this one compared to your first?

    0Reply
  • Adam R Gebner
    OP
    Rental Property Investor · Tacoma, WA · Member since 2019 · 6 posts · 13 votes
    5y

    Here is our biggest take away: you need a quality contractor! You will get what you pay for. 

    This is not necessarily the most important part of the whole process, but it was a large part in the difference between how our two rehabs went. 

    0Reply
  • Latoya Tomlinson
    Charlotte, NC · Member since 2017 · 5 posts · 1 vote
    5y

    @Adam R Gebner Which lender did you use for the refi? I'm looking at a couple of different options for BRRR in Fayetteville right now so I definitely want to make sure that I also have some good lender options on the backend!

    0Reply
  • Shawn Burns
    Realtor · New London, CT · Member since 2019 · 19 posts · 6 votes
    5y

    @Adam R Gebner Congrats!! That sounds like an awesome deal and I am very impressed with the numbers. If you don't mind me asking, how did you find the deal? 

    0Reply
  • Adam R Gebner
    OP
    Rental Property Investor · Tacoma, WA · Member since 2019 · 6 posts · 13 votes
    5y

    @Latoya Tomlinson we actually used a community bank out in Washington State. We moved out here last year and it was our best refi option. I actually haven't had much luck with anything in Fayetteville for the refi portion. 

    @Shawn Burns we found it after searching for about three months last year, and many offers. 

    1Reply
  • Kenneth Burdick
    Rental Property Investor · Rancho Cucamonga, CA · Member since 2020 · 60 posts · 23 votes
    5y

    Congrats on the killer BRRRR! How were you able to raise the value so significantly with only putting $10k into it?

    0Reply
  • Don-Carlos Moniz
    Real Estate Agent · Fayetteville, NC · Member since 2020 · 108 posts · 108 votes
    5y

    @Adam R Gebner, that is great. I just started getting active on BP and it is awesome to see someone in my local area completing a project like that. Good luck on the next one.

    1Reply
  • Alexander FelicePro Member
    Guy with Great Hair · Austin, TX · Member since 2013 · 2k+ posts · 4k+ votes
    5y

    Love this deal for you! Great job 

    [email protected]Podcast Guest on Show #301
    1Reply
  • Michelle Kotler
    Member since 2017 · 9 posts · 4 votes
    5y

    Great deal!  Did the lender base the refi only on the rental income or did you have to show personal income?  I’m looking for lenders who will refi based only on rental income. 

    1Reply
  • Adam R Gebner
    OP
    Rental Property Investor · Tacoma, WA · Member since 2019 · 6 posts · 13 votes
    5y

     @Michelle Kotler they looked at all my income that had at least a 2 year track record, to include rental income. 

    0Reply
  • Walan W.
    Investor · San Francisco · Member since 2021 · 1 post · 0 votes
    5y

    Congrats on an awesome deal! How did you and your wife find this property?

    0Reply
  • George DespotopoulosBusiness Member
    Lender · New York, NY · Member since 2016 · 936 posts · 287 votes
    5y

    @Michelle Kotler there are DSCR lenders that will lend to you based on the rental properties income and not your personal income. This would be for a traditional 30 yr fixed with rates in the 4.75% - 5.875% range currently.

    MoFin Lending4.9152 Reviews
    WebsiteView Page
    0Reply
  • Don-Carlos Moniz
    Real Estate Agent · Fayetteville, NC · Member since 2020 · 108 posts · 108 votes
    5y

    @George Despotopoulos, is that based on a rental property that you currently own, or can it be based on the history of the rental property that you are looking to purchase? Also, the rates, are they based on the bower's credit rating or based on the investment property's income potential? I could see this as a good option for investors, but I am sure lenders are going to exercise a level of diligence in originating these types of loans.

    0Reply
  • George DespotopoulosBusiness Member
    Lender · New York, NY · Member since 2016 · 936 posts · 287 votes
    5y
    Originally posted by @Don-Carlos Moniz:

    @George Despotopoulos, is that based on a rental property that you currently own, or can it be based on the history of the rental property that you are looking to purchase? Also, the rates, are they based on the bower's credit rating or based on the investment property's income potential? I could see this as a good option for investors, but I am sure lenders are going to exercise a level of diligence in originating these types of loans.

    If you are using this type of product for a purchase, then the rent that's being underwritten to is based on the market rent, which is established in the appraisal report (the appraiser provides a market rent analysis based on rental comps). If you're refinancing a property you own, then it's based on the lease rent (you provide a copy of your lease & evidence of receipt of two months' of lease rent). 

    The rates are primarily driven by credit score and LTV. Then there are adjustments for things like property type, loan amount, prepayment penalty term, location, the DSCR (debt-service coverage ratio (basically the cash-flow) which you get by dividing Gross Rent by PITIA).

    Any loan you get, whether it's a 30 yr loan from a non-bank lender or a 6-12 month interest-only hard money loan, should have some level of diligence but it's still very much easier, and quicker, than working w/ a bank or non-qm lender. 

    MoFin Lending4.9152 Reviews
    WebsiteView Page
    0Reply
  • Don-Carlos Moniz
    Real Estate Agent · Fayetteville, NC · Member since 2020 · 108 posts · 108 votes
    5y

    @George Despotopoulos, great information. Thank you for the education.

    0Reply
  • Michelle Kotler
    Member since 2017 · 9 posts · 4 votes
    5y

    @Adam R Gebner thanks for your reply.

    0Reply
  • Christopher N.
    Twin Cities, MN · Member since 2021 · 6 posts · 1 vote
    5y

    @Adam R Gebner

    Congratulations! Seeing success stories is inspirational to someone just getting started like myself.

    0Reply
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