Single Family BRRRR

[Kyle G.]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $85,000

BRRRR in the making! Currently under renovation from a 3bd/1bt to 2bd/2bt. Relocating kitchen, creating a bathroom out of thin air, replacing and moving all major mechanicals, improving electrical, siding, windows, roof, landscape; the works! Before/after images to be provided. This will be a primary residence for 2-3yrs, then on to a long-term rental.

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

Need for a new primary residence closer to family, and reduced cost of living.

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

Living 5.5hrs away, we had family walk through the property and video chat us the day it hit the market. The next day (Thanksgiving Day), we submitted our offer; one of three, and ours was accepted!

Offer Terms: All cash, waived inspection, close at seller's convenience, escalation clause to $92.5k (unexercised)

How did you finance this deal?

Private lender for purchase and rehab.

How did you add value to the deal?

Complete renovation.

What was the outcome?

Seller requested a 30-day close, which we agreed to. The day before close, they attempted to cancel the sale. Eventually, their realtor and the lawyer were able to convince them to fulfill their side of the agreement. At closing, the seller requested a post-sale occupancy agreement, as they had not moved out. We agreed to a 30-day POA. Seller ended up occupying two additional weeks, but eventually moved out the day before we were moving into town...

Lessons learned? Challenges?

Doing the work yourself can be monetarily cheaper, but not in time! Be careful with post-sale occupancy agreements; don't turn into the unwitting landlord of a squatter!

[Alena Beecher-Ritchie]

Congratulations! But omg, they tried to cancel the sale 1 day before closing! That's a nightmare.  Pretty awesome that you were able to obtain the property completely after 6 weeks. 

Which part did you DIY, but in hindsight wised you hired a technician?   And did you have any major surprises since you forgo the due diligence period?