How I got a ridiculous 56.7% cash on cash return using BRRR

[Jeffrey Holst]

I bought a duplex last year in Chattanooga off of the local MLS for 58K and spent about 26K doing a rehab on the property. When I bought it someone had hit a brick wall with a truck and the resulting hole was covered by plywood. It needed all new flooring, windows, painting, HVAC and appliances but I was able to turn it around in about 2 months and get it rented for 775 and 700 for a total monthly rent of 1475.

I was all in at 86K we got it appraised at 95K (which i think is low) the local bank I work with agreed to refi up to 80% of appraised or 90% of cost which ever was less, in this case it meant that I was able to pull back 76K which meant I only left in 10K.  

I am easily cash flowing more than $200 a month per unit.  

Rents are $17,700  with tenants paying their own utilities and total costs are $12,030 including the mortgage payment.

(10% management $1770, 5% vacancy factor $885, maintenance $885, lawn care  $900, 10 % Cap ex $1770, Payments $5820)

This leaves $5670 dollars a year in cash flow for a ridiculous 56.7% cash on cash return!  It wasn't super easy but it also wasn't that hard.  Deals are tight but they exist and this can be done.  

[Eric James]

I like the brrr strategy, but it can lead to some odd COC return numbers. If you can refi and pull out more than your initial cash outlay, what is the COC return? Glad it is working out for you.