BRRRR in East Tacoma/ WA

Real Estate Deal Analysis & Advice
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BRRRR in East Tacoma/ WA

Rudy Manna
Investor · Redmond, WA · Member since 2016 · 267 posts · 110 votes

This is a BRRRR we finished about a month ago along with partner @Pradeep Tiwari..

@Timothy Tooker doubled up as agent to find the deal and GC services..

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Overall, we generated quite decent walk-in equity ($36K, 18%), and cash flow rate of 0.95%..

We rehabbed mostly the interiors, we left exterior paint and windows, to make the numbers work.

Here are the numbers:

Purchase: $130K

Hard Money Cost: $8K

Construction Cost: $24K

Closing Costs: $4K

Total Acquisition Cost: $166K

ARV: $202K

Rent: $1570 (0.95%)

Walk in Equity: 36K

Before:

After

4Reply
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Most Popular Reply

Peggy Kiker
Savannah, GA · Member since 2014 · 11 posts · 2 votes
9y

Hi Rudy, I noticed you used a hard money lender. How much did you bring to the deal yourself and were you able to quickly refinance with a bank? (I know usually they want a year or so of rental history), how were you able to refi and pay off the hml so quickly? What's your net cash flow per month now?

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  • Michael S.Pro Member
    Biggerpockets Support · Las Pinas, Metro Manila · Member since 2015 · 7k+ posts · 1k+ votes
    9y

    Awesome work Rudy. Congrats!

    BiggerPockets
    1Reply
  • Ike Hobbs
    Investor · Wichita, KS · Member since 2016 · 133 posts · 63 votes
    9y

    Nice job! 

    0Reply
  • Michael Mullins
    Investor · Cedar Park, TX · Member since 2016 · 463 posts · 177 votes
    9y
    Great job man. Love your pictures
    0Reply
  • Timothy Tooker
    Real Estate Agent · Puyallup, WA · Member since 2012 · 240 posts · 95 votes
    9y

    @Rudy Manna, @Pradeep Tiwari,

    Gentlemen,

    Thank you for the opportunity to assist you in finding and renovating your investment properties. Looking forward to future projects.

    0Reply
  • Michael Schlager
    Investor · Meridian, ID · Member since 2016 · 11 posts · 12 votes
    9y

    Looks great!  What did you do to the exterior?

    0Reply
  • Rob Allegrini
    Real Estate Agent · Vancouver, British Columbia · Member since 2016 · 5 posts · 1 vote
    9y

    Great reno, and fantastic result!

    0Reply
  • Tim Boehm
    Investor · Tillamook, OR · Member since 2013 · 8 posts · 4 votes
    9y

    Great to be in the middle, catch them going up and coming down. Craig's list housing forum is also a great place to learn from experienced LL's

    0Reply
  • Rudy Manna
    OP
    Investor · Redmond, WA · Member since 2016 · 267 posts · 110 votes
    9y
    Originally posted by @Michael Schlager:

    Looks great!  What did you do to the exterior?

    We didn't do anything to the exterior. We left exterior paint and window as it is..Our math suggested that we will reach target ARV even without exterior work, in hindsight we were right :)

    2Reply
  • Jeremy Stroud
    Baton Rouge, LA · Member since 2017 · 19 posts · 5 votes
    9y

    Rudy, 

    Has this sold yet, or is that what you are hoping to get?

    0Reply
  • Gilbert Lugo
    West Palm Beach, FL · Member since 2017 · 91 posts · 19 votes
    9y

     Great work!

    How did you fund the rehab after purchase?

    0Reply
  • Peggy Kiker
    Savannah, GA · Member since 2014 · 11 posts · 2 votes
    9y

    Hi Rudy, I noticed you used a hard money lender. How much did you bring to the deal yourself and were you able to quickly refinance with a bank? (I know usually they want a year or so of rental history), how were you able to refi and pay off the hml so quickly? What's your net cash flow per month now?

    2Reply
  • Autumn Allen
    Investor · Renton, WA · Member since 2015 · 44 posts · 9 votes
    9y

    Great job guys!

    1Reply
  • Mike Mack
    Real Estate Investor · Mackenzie, British Columbia · Member since 2017 · 9 posts · 4 votes
    9y

    Right on man. Good job. What was the sellers original asking price and how did you determine your offer?

    0Reply
  • Lamar Norsworthy
    Memphis, TN · Member since 2016 · 16 posts · 5 votes
    9y

    Seeing these numbers actually made me realize something that while I am looking for my first deal that because I am looking to implement the BRRRR strategy that I don't need to hit the Cash floor rate of over 1. Being that so much equity is built up with the ARV less Acquisition costs, that your cash flow rate can be lower.

    Thanks Rudy, look forward to seeing the future deals.

    0Reply
  • Jason Scobie
    Virginia Beach, VA · Member since 2015 · 15 posts · 2 votes
    9y

    where did you get the $130 to purchase the property? If you financed through the hard money lender what percent did they give you?  How long have you had this property?

    have you refinanced this deal? I see a couple of holes or am I missing something. 

    0Reply
  • Timothy Tooker
    Real Estate Agent · Puyallup, WA · Member since 2012 · 240 posts · 95 votes
    9y

    @Jason Scobie

    They went through MBO NW, LLC for the hard money. Terms were 12% 2 points. They had the property roughly 60 days. They are already refinanced out.

    2Reply
  • Jacqueline Lord
    Katy, TX · Member since 2017 · 1 post · 0 votes
    9y

    Hello! This is awesome!  How would you guys suggest starting out? Please direct me. - Jacque

    0Reply
  • Jason Scobie
    Virginia Beach, VA · Member since 2015 · 15 posts · 2 votes
    9y
    So how can you refinance a loan with one year? It's against the law unless u have owner finance or u paid cash.
    0Reply
  • Rudy Manna
    OP
    Investor · Redmond, WA · Member since 2016 · 267 posts · 110 votes
    9y
    Originally posted by @Peggy Kiker:

    Hi Rudy, I noticed you used a hard money lender. How much did you bring to the deal yourself and were you able to quickly refinance with a bank? (I know usually they want a year or so of rental history), how were you able to refi and pay off the hml so quickly? What's your net cash flow per month now?

    Usually we put 10%-15% of initial purchase price, the rehab costs are wrapped into the loan as a separate renno loan. We do a rate-term refi of HML within 2-3 months, which covers both purchase and renno loan. However, the downside of not waiting for the seasoning period and doing a rate-term faster means initial money we put stays in the deal which is about ~5% of ARV.

    0Reply
  • Rudy Manna
    OP
    Investor · Redmond, WA · Member since 2016 · 267 posts · 110 votes
    9y
    Originally posted by @Jason Scobie:

    So how can you refinance a loan with one year?

    It's against the law unless u have owner finance or u paid cash.

     There is no Required wait period for rate-term refi. You may have to wait for cash-out refi.

    1Reply
  • Jason Scobie
    Virginia Beach, VA · Member since 2015 · 15 posts · 2 votes
    9y
    So now your cash is tied up in this property?
    0Reply
  • Jason Scobie
    Virginia Beach, VA · Member since 2015 · 15 posts · 2 votes
    9y
    Not sure if I am adding this correctly. 10% down (minimum,not sure what you put down) = $13000 of your own money. $8000 for the HM $4000 closing Total out of pocket is $25000 correct?
    0Reply
  • Rudy Manna
    OP
    Investor · Redmond, WA · Member since 2016 · 267 posts · 110 votes
    9y
    Originally posted by @Jason Scobie:

    Not sure if I am adding this correctly.

    10% down (minimum,not sure what you put down) = $13000 of your own money.
    $8000 for the HM
    $4000 closing
    Total out of pocket is
    $25000 correct?

     Some of the Hard Money costs are wrapped in the loan, also mortgage allows 1%cashback, our total money in the deal was just over ~$15K.

    2Reply
  • Connor Maloney
    Real Estate Investor · Anchorage, AK · Member since 2015 · 117 posts · 42 votes
    9y

    Nice job!! Also, nice job analyzing the numbers and using them to make good decisions on what to fix up and not fix up. The cool thing about BRRRR is that you don't have to fix it up as nice a flip house!

    0Reply
  • Jacob Lampert
    Investor · Happy Valley, OR · Member since 2015 · 2 posts · 0 votes
    9y

    Nice work & Thanks for Sharing!

    Who did you use to refinance the property?

    0Reply
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