I'm beyond excited to be able to share this. 18 months ago @Chris Dumm and I sold our house and bought a 4 unit complex. The complex had good bones but was a C property (in terms of condition and tenants) in a B neighborhood. We moved into one unit and got to work! We gave the old tenants 60 days notice and renovated each unit.  We put in completely new kitchens, upgraded the electrical, renovated bathrooms, new flooring and paint, etc. We added on site laundry and redid all the landscaping.

Doing all this allowed us to increase rents 30%+, which means the three rented units cover the PITI for the property so we have no housing costs. But as this was a BRRRR, the true mark of success would come when we could pull some of our cash out (we knew we would never pull it all out) to fund the next purchase.

Our original plan for the property was a cash out refi. Unfortunately, one of two big mistakes we made was not planning for the possibility of rates rising; with a huge mortgage a 0.5-0.75% interest rate increase makes a huge difference. Luckily, there's one bank which does HELOCs on OO 4 units. But they won't count rental income until it's reported on tax returns, and all our new tenants had moved in Q1 of 2017, so we wouldn't have the rental income on our taxes for almost a year.

So we waited. And waited. And waited some more. And of course while we waited life kept us busy, units turned over, and we wrapped up some final improvements to the property we didn't get to in the first round. Finally, it was time to do our taxes! And just as quickly start the HELOC process.

This Monday we had the property appraised. Knowing that refi appraisals are notoriously lower than purchase appraisals we anxiously awaited the appraiser's analysis. Today we got the number; here's the breakdown:

Purchase price: $1.175M

Down payment: $235K

Renovation cost: $63K

Sweat equity: Enough to fill a dozen home depot 5 gallon buckets

Initial goal ARV: $1.35M

Actual appraisal: $1.4M!!!

We actually beat our goal! With 18 months and $298K we increased out net worth by $225K! And that doesn't even include the $25K of the mortgage paid down in that time. Assuming our DTI allows it, we can pull out $200K and maintain an 80% LTV on the property.

We've known this whole time that this property was worth it, but this kind of outside validation feels amazing. This has been a tough road, and we've grown by leaps and bounds in terms of our renovation understanding and our landlording skills.

I don't yet have final numbers on loan amount and terms, but even if the story stopped here I consider it a success. More importantly we've almost reached one of our 2018 goal- be ready to buy another multifamily.  Onwards and upwards!