2nd BRRR done- onto number 3- 2 more in progress.
Good morning all- sharing 2nd success story.
Town: Manchester, CT
Property type: Duplex
3 Bedrooms/2 Bathrooms per side
Purchase Price: $65,000
Renovation costs: Siding and roofing (full resheath), New furnaces, electrical, ripped out plumbing, flooring, kitchen baths. - totalling@ $69,000
End Valuation: $200,000
Refinance: $140,000 out 5 year ARM 20 year amortization
Rent: $1250/unit
Monthly Cash Flow: $507.96
Next up: Refinance of auction.com property in New Britain.
This is the 2nd BRRRR strategy for myself and my cousin. The goal is build up $10,000 cashflow/ month per partner. As of the end of this project we are up $500/month per partner. Each house we are doing gets us about 2.5% of the way to the goal. We have 5 total purchased and so by the end of 2016 we will hopefully be up to $1250 per partner/ month. This is since we began in 2015. Shout out to @Michael Noto for helping me with my on market deals.
This is great. It sounds like you've got a solid plan and you're working it. Are you doing much / any of the rehab work yourself? How is your market for investors? Are you finding a lot of competition for multi-family properties?
I'm in Spokane, WA and will close on my first investment property / duplex in a couple weeks. I'm planning a light rehab - 5-7k and hope to have similar cash flow.
Congratulations and keep the updates coming.
How are you finding your properties? MLS, auctions, wholesalers your own direct mail program?
Currently 3 are MLS houses, 1 auction.com property, 1 wholesaler.
@Todd Powell I am doing none of the work myself other than project managing. There is competition to be had in some of the market, but if you are patient there are deals to be had. The main thing is that the apartments I am finding are more extensive.... not cosmetic rehab.
Thanks for the shout out @William Collins
@William Collins sounds like you are getting a great start on your goals. How are you doing your financing? Did you have a big pot of money to start with between investors? Or doing some sort of private money lending? It looks like with the refinance you won't have equity to reinvest or am I looking at that wrong? Keep up the good work and good luck on your goals.
This is all about partnering @Shawn Peden, my cousin and I are doing this together. We are using his large HELOC as private money and our formula to use that for cash offer and renovation. We then are able to refinance out 95 to 110% of that money and repeat on the next equation. There is a minimum of 30% equity gain in each of these we do which we leave in that BRRRR house. That let's us have an exit strategy of quick sale- as we can discount the property.
Hope that makes sense.
Pics or it didn't happen :p
Congrats on this deal William! I am currently looking for my first BRRRR deal and hope to have the same success. How did you select your lender for the refi and did you have them in place prior to purchasing?
@William Collins that makes perfect sense. I am working on 2 BRRRR properties ATM as well, one with a partner, one on my own. I really love the idea of the BRRRR strategy and this will be my first implement of it. So I guess I was basing my question off of the numbers you provided and I must be missing something, you said purchase of $65k and rehab of $69k = $134k, with a refi of $140k? That's only $6k-ish to reinvest? Also where are you finding 95-110% on a investment property, best I have found is 80%, or are you able to do owner occupied somehow? Very interested in hearing more.
@Steven Gillmer I found a lender who will scale to past 10 (portfolio lender) to work with when pursuing the 1st property I did. @Shawn Peden The originally invested money 134k + 6k get recycle to the next investment. These are all financed to 70% of ARV and so we have 60k of equity remaining in the house.
