Investor · Mechanicsburg, PA · Member since 2017 · 110 posts · 50 votes
Hello BP'ers! Wanted to share this success story with all of you who have guided and inspired me each step of the way as I was dwindling in this uncharted territory. So here is the short of it as it stands around 6 months after I purchased this property -
SFR; 3Bed; 3Bath; 1080Sq. ft.; Ranch home with walk out lower level; 8400 Sq Ft. lot
Acquisition price + Closing costs - $82000 (Bank owned reverse mortgage property so bought it at listed price in April)
Rehab cost - $4300 (Yes, I went overboard with it as initial estimate was only 25k, talk about estimation :))
Total in : $125000
Rented in August 2017 for $1400 (I believe I am getting rent on the higher side for the area, because of the improvements)
Appraisal came in today for refinance at $168000, so essentially I'll be able to clear all the money poured into this! Not considering closing costs for refinance, this amounts to infinite returns!
Needless to say that I am super excited after this roller coaster of a journey....
@Amit G. Congratulations,This is a great 1st deal! Did the appraisal value of the property surprise you or no? Also, how was your experience with the bank... did they pull any tricks on you worth hearing about?
@Michelle D. I am glad you asked that and I'll be happy to share with everyone. So the short answer is No, I wouldn't have! At the time of buying, the comps that were given to me by realtor were at $140k, so of course I did my calculations based on that: 81k (acquisition) + 25k (rehab) = 106k which is 75% of 140k and was ideal candidate for BRRRR strategy. I wanted to get things done the right way so overspent on rehab, but it was essentially a major rehab.
So with my second project, which is a 5 unit Multifamily, I am starting things the way it should have been. I have clearly defined Statement of work for my contractor that we both agreed upon. I also have detailed price listing based on SOW from my contractor. I hope this time it is closer to +/- 10%.
Thanks @Jorge P.! I actually got the condensed appraisal done right after I finished and tenants were in place, so was expecting it to be in the range it came to be. I think that was a good move, as it took the stress of the unknown away!
The bank is investor friendly and I didn't compare shop a lot! I have it refinanced at 4.5% for 30 year.
Nice Job @Amit G. !! Property looks really great. Do you happen to have before/after pics of the interior?
Also, thanks for sharing the report from the BRRR Calculator, I love the finished look and all of the thorough information is very helpful to understanding the BRRR method.
Thanks @Bobby Asch. Monthly Cash flow after refinance is at the very top, $149. I would recommend you take a look at some of the videos that Brandon has put together to use the calculators. That will clarify some of the numbers in report.
One of the things in the report many will notice is that I have used lower numbers for repair and CapEx and that is only for the reason that this property went through complete rehab and all the major expenses have been tackled up front. It is generally recommended to set aside at least 5% for repairs and 10% for Capital expenses.
Congrats @Amit G.! Looks like an awesome job for your first BRRRR and very inspiring!
How did you acquire the financing at first to get it done (downpayment, purchase and rehab costs)? Out of pocket, partner/private money, conventional loan?
Saw your calculations but I need initial funding to make it happen and am looking for more ideas.