Updated over 2 years ago on . Most recent reply
Our First Deal Cash out Refi
Investment Info:
Single-family residence buy & hold investment.
Purchase price: $137,000
Cash invested: $53,000
On our first deal we utilized the BRRRR strategy to purchase this property using a commercial real estate investment loan from a local bank in Eastern Tennessee. We paid a contractor cash to add a bedroom and bathroom to the basement of the property. This added equity allowed us to cash out refinance $37,000 to invest in our next property. We have $16,000 of our own money left in this deal.
What made you interested in investing in this type of deal?
Reading the BRRRR Book by David Greene
How did you find this deal and how did you negotiate it?
Through our realtor on the MLS. Our Realtor is a real estate investor as well and so she personally contacted the seller and informed them that we were two young and eager investors looking to remodel the home as the seller had intended to do but did not have the means to do so. Although our offer was the lowest out of many offers we connected with the seller and were able to meet their intended needs for the property.
How did you finance this deal?
Commercial real estate investment loan from local bank
How did you add value to the deal?
Added a bedroom and bathroom to the newly finished basement increasing the livable square footage.
What was the outcome?
We ended the project exactly on budget and were able to cash out 85% of the LTV of the ARV to use as a downpayment on our next property.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
The lender that we worked with is First Community Bank of Eastern Tennessee. They are a investor friendly bank. Also, our realtor Constance Grandelli played a key roll in the acquisition of our first deal. We even paid her to be the project manager throughout the remodel.
