Another Chicago South Side BRRRR Complete

[Christopher Malone]

Before Photos

[Christopher Malone]

Purchase Price - $45,000

Rehab Cost - 36,000 (over budget by $6,000) 

ARV - $110,000 to $120,000

Rent Amount - $1,540 (Section 8)

I apologize for the way this post was pieced together as i accidentally hit send on the before photos. This is a my latest rental completed using the BRRRR strategy and everything went quite well for the most part.

Mistakes Made:

• Purchase Price - Looking over this entire project, I can honestly say that i may have paid too much given everything needed to be fixed that was hidden.  
• Closing Cost - Riding the high of my previous BRRRR project, i rushed into this one and did not budget the closing cost correctly. I still went through with the deal, but I will end up coming short on re-cupping this after the refinance is complete.
• The True Cost of Hard Money - This is tied in with the closing cost portion as I definitely fell short by failing to ask more questions regarding the fees associated with the Hard Money loan I used.
• Cost of Materials - This is really  mistake, but I am including it anyway as I could have done a better job on the front end with selecting the correct materials on the front end. I changed my mind midway through the rehab on the materials I wanted to use for the project and went with more durable materials than i originally planned, which in turn increased my cost.  

I am currently in the process of refinancing and I locked in a 4.75% rate with the same credit union that I have been banking with for years. The LTV is 75%, The Mortgage is set to be $460, and I am shooting for a $120,000 appraisal, but I am not banking on it.

I hope this helps others learn from the mistakes I made here. I already have my next project under contract so I will be looking to avoid making the same mistakes.

Good Luck!

Special thanks to @Mark Ainley at GC Realty for assisting and mentoring me whenever I hit a wall!