BRRR strategy

[Aron Cohen]

I wanted to share my recent success story following @Brandon Turner BRRR strategy. We purchased 4 single homes as a package deal that had some distress along with squatters. We dealt with the squatters and got right to work on the rehab. The original purchase price was 105,000 for all 4 homes. The cost per home came out to be about 27,000 with closing to be 3,500 per home which includes purchase closing and refi closing. Total rehab costs were 60,000. Our first appraisal came in at 81,000, 2nd came in at 125,000 and 3rd came in at 70,000. We are still waiting on the last home's appraisal which we project to be close to 100,000 but with just those three appraisals we are able to cash out $206,000. We have 3 tenants already in place that average $1300 per home. This strategy is allowing us to continue to acquire homes monthly with all of our capital plus a profit from the BRRR strategy. I want to thank everyone who has given feedback and comments on BRRR and especially @Brandon Turner for introducing me to this strategy. Thank you and good luck investing!!

[Robbie A.]

@Aron Cohen, ah okay the LTV is where I was confused. So to break this down from a "first deal perspective," you get the first property with cash, repair/refinance and then get an LTV loan of 75% of the newly appraised value of the home, then take that loan (so it's no longer cash at this point) and repeat the process on the next property. So with this strategy, you only need cash for the initial property and then use LTV loans for all other properties? 

Really appreciate your time and thanks for answering everyone's questions! I need to start doing some digging on LTVs.