Latest Duplex BRRRR Deal!!!

Latest Duplex BRRRR Deal!!!

Real Estate Agent · Cincinnati, OH · Member since 2015 · 474 posts · 580 votes

Here is my current project on another BRRRR duplex in Deer Park, Ohio just outside of Cincinnati. I wanted to share the back story on how I picked up this off market deal with hopes to inspire other investors and hopefully add value to your investing!

For those who I have not met yet on BP, I am a police officer/real estate agent/MF investor in a small town near Cincinnati, Ohio. While out on patrol I was dispatched to this home for a burglary report. Long story short, this lady inherited this house that had sat vacant for 18 months, and she believed an ex-roommate of her late brother had broken a window out to steal some beer and a TV. She was crying and explaining this house was a money pit for her, she had no money or knowledge to fix it up to sell it, and just hoped someone would burned it down honestly.. I know telling a cop this... 

I explained to her that Deer Park is a great real estate market and she could sell this home as is. I also explained that I am a real estate agent/investor and buy and sell homes in this neighborhood often, if she would like my help. I gave her a card, and took the report. She called me later that same day and asked if she could get 50k for this duplex. I told her I would would be willing to buy the home, but I wanted to bring my contractors through it to price out renovation cost. After pricing out the entire renovation, which includes all new plumbing, electrical, framing, insulation, interior and exterior work, and a complete cosmetic gut and rehab, I could pay her 40k. She was extremely happy to be rid of this money pit, and I was adding a great BRRRR deal to my portfolio.

The numbers:

Final purchase price: $39,000.

Rehab budget: $60,000.

Current as completed appraisal value: $155,000.

Market rents: Unit 1 (2/1, 850 sqft) $875, Unit 2 (1/1 650 sqft)  $675. Garage for rent (20x20) $100+/mo

Total: $1650+/mo

Based on my current projections, after renovations, and refinancing to a 30yr fixed conventional mortgage. I will cash out around $5,000 in profits, have 25% equity with zero money left in the deal, and cash flow around $400/mo after all expenses. This should work out to be my best deal yet.

Thank for you taking the time to read my story, my hope is that you will take away a few points. Regardless of your profession, you need to be telling everyone what you do and what you are looking for, I have found a few deals this way. If no one knows, opportunity cant find you. There are still deals out there, they are harder to find, but deals like this are out there and do happen all over the country everyday. Even though I got a great deal on this duplex, this is a massive project that will take months to complete. So put yourself in a position to take the opportunities that life will present to you, and make deals a win-win anytime you can. I got a great deal, she got rid of a massive liability with zero cost or effort. 

I will post some before and after photos of the project as I have them. I would love to hear your thoughts and projects you are working on too!

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Most Popular Reply

Investor · Greenville, SC · Member since 2016 · 5k+ posts · 13k+ votes
7y

Win - she sold the money pit

Win - you got a nice BRRRR

Win - roommate got some 18 month old beer

See this reply in the discussion

55 Replies

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  • Hebron, KY · Member since 2018 · 1 post · 0 votes
    7y

    that's a great location,  thank you for sharing and your advice

  • Investor · Clermont, FL · Member since 2018 · 26 posts · 17 votes
    7y

    I am a newbie investor, and that deal inspires me. Congrats Joe!

  • Rental Property Investor · Raleigh, NC · Member since 2018 · 20 posts · 7 votes
    7y

    Congratulations Joe.  Sounds like a great win for you and a real win for the person you bought it from!

  • Real Estate Broker · Streamwood, IL · Member since 2015 · 18 posts · 4 votes
    7y

    Great deal and congrats on the success!  Also curious how you financed the purchase and rehab?

  • Newport News, VA · Member since 2018 · 9 posts · 4 votes
    7y

    Sounds like it was a great opportunity

  • Investor · Arlington, VA · Member since 2012 · 1k+ posts · 491 votes
    7y

    Thanks for sharing!  Stay on the grind!

  • Real Estate Agent · Cincinnati, OH · Member since 2015 · 474 posts · 580 votes
    7y

    @Judy Murphy Thank you as well! I am happy to inspire new investors, BP gave me inspiration countless times when I first began investing! 

    @Cam Jimmy Awesome! Yeah, deals like this are very hard to find in my area as well, even in this condition it could have probably sold for 80k+. 

    @Michael McCoy She sounds like a wise woman! Thank you!

    @Jerry Villa It is currently under construction, it will probably be a 3-4 month total project. I will post the after photos as soon as I have them, thanks!

    @Steve Theders @Rob Barry Thank you guys!

    @Chris Schu In Deer Park the main reason property taxes are so high is due to the school district. However, the higher rated schools also draw a better tenant class and higher rents. 

    The high water bills are due to horrible mismanagement of the City/County water treatment facilities and poor infrastructure where they pass all the cost onto the residents. That is what really bothers me, I live one county over in Clermont County, and I have two other buildings there. Water/sewer cost are less than half of Hamilton County for the same amount of water usage. 

    @Peter Guerra Sounds like a great deal, congrats!

    @Brian Dennis I purchased it upfront with an 80% LTV commercial loan that includes my construction funds, at 6 months I will cash out refi to a conventional 30 yr fixed mortgage.

  • Real Estate Agent · Cincinnati, OH · Member since 2015 · 474 posts · 580 votes
    7y

    @Michael Howell Thank you! I am glad I could inspire you!

    @Naomi Hanson Definitely not, there are still deals on the MLS and off market, it just takes more time and effort to find them or make them work!

    @Tchaka Owen I hope so, I was conservative with my estimates but there are always unexpected cost. Plus there is a lot of outside work I will be doing when it warms up. 

  • Real Estate Agent · Minneapolis · Member since 2018 · 39 posts · 28 votes
    7y

    Awesome deal! Loved reading it. The story stresses several important points in my mind:

    Always be telling others about what you do.

    Always try to find ways to turn problems into opportunities.

    Be sure to get accurate rehab estimates before committing to a price. That’s the piece I could see a lot of newbies skipping in their excitement to have a great potential deal.

    Hope everything turns out well with this project!

  • Real Estate Agent · Cincinnati, OH · Member since 2015 · 474 posts · 580 votes
    7y

    @Jeremy Mangen Great points to take away! Estimating rehab cost was definitely one of the most difficult things for me when I first started investing. 

  • Martin NealPro Member
    Rental Property Investor · Chicago, IL · Member since 2017 · 293 posts · 383 votes
    7y

    @Joseph Cornwell Great Job!! Win win situations are the best!

  • Miami Beach, FL · Member since 2015 · 33 posts · 13 votes
    7y
    @Joseph Cornwell I love your story but being a firefighter/medic I wouldn't share this story on a social media platform.
  • Dania, FL · Member since 2016 · 3 posts · 2 votes
    7y

    Great story, very inspirational and educational. I am a Realtor myself in Dania Beach , Florida and an investor as well. Recently me and my partner purchased a Duplex that I found on MLS , the owner did not want to do any repairs and was motivated to sell. We got a pretty good deal : 2 bed / 2 bath each unit , $315,000. After 6 month living in one unit and renting another we fixed only what was necessary and did some cosmetic upgrades. Very happy how it came out and looking forward to get another multifamily soon. So, basically we are " house hacking " for our first multifamily investment property. Happy investing and cheers! Mila

  • Real Estate Broker · Vero Beach, FL · Member since 2018 · 79 posts · 36 votes
    7y

    Wonderful Story Joseph! It is great when our work as investors is able help people overcome a challenging situation as well. Keep up the great work and thank you for your service as a police officer!

  • Real Estate Agent · Commerce CIty, CO · Member since 2018 · 127 posts · 78 votes
    7y

    It certainly seems manageable.

  • Realtor · Orlando, FL · Member since 2018 · 45 posts · 5 votes
    7y

    Congratulations!!!

    It’s a great deal. Best of luck with the renovations. 

  • Fort Worth, TX · Member since 2018 · 7 posts · 1 vote
    7y

    @Joseph Cornwell truly inspiring story. I am new to the real estate world and I am realizing that it is important to talk about what you are interested in. I love the strategy of giving her your card and waiting for her to call. Truly a win win situation.

  • Realtor · Cincinnati, OH · Member since 2018 · 140 posts · 53 votes
    7y

    Good job @Joseph Cornwell  Look forward to hearing more at the next meetup!

  • Jay LohnBusiness Member
    Real Estate Agent & Investor · Champlin, MN · Member since 2014 · 179 posts · 43 votes
    7y

    Congrats! Christmas came early this year.

    Lohn/Paulno Property Management, LLC53 Reviews
  • Real Estate Agent · Zimmerman, MN · Member since 2016 · 5 posts · 0 votes
    7y

    Hi my question on BRRRR is what if you are not able to refinance because of job situation (new job) or income limitations? How does that work?

  • Real Estate Agent · Cincinnati, OH · Member since 2015 · 474 posts · 580 votes
    7y

    @Kurt Sutherland you would definitely need an exit strategy. I have used commercial loans 20 yr amortizations, 5/1 ARM in the past to get around certain financing overlays, such as a new job. Commercial lenders are more flexible in what they are allowed to lend on and to whom. If the newly rented apartments increase your income and improve your DTI ratio, it may help you qualify.

  • Flipper/Rehabber · indianapolis, IN · Member since 2018 · 3 posts · 0 votes
    7y

    Way to keep your eyes open for a deal! There is no shame in advertising what you do to everyone and anyone. That was a win win!

  • Rental Property Investor · Cincinnati OH · Member since 2018 · 39 posts · 31 votes
    7y

    @Joseph Cornwell This is truly inspirational to me thank you for posting! 

    For financing, doing a 80%LTV was feasible because it was a commercial loan that anticipated the increased rents and value of the home, is that correct? My other question is how were you able to put in place a traditional 30yr loan if you are not owner occupying?

    I just bought my first Duplex owner occupy and am curios how to finance more. Again, congratulations on this deal well done!!

    -Andrew

  • Real Estate Agent · Cincinnati, OH · Member since 2015 · 474 posts · 580 votes
    7y

    @Andrew Cheek 80% LTV on the commercial is just the best terms that I have found for non owner occupied loans. It was not based on any rent increases or value increase. It was a current appraisal after the renovations, "as completed" appraisal they call it here. You can do a 30 yr conventional fixed loan on any non owner occupied home 4 units or less, but typically it is 70-75% LTV. That is what I will be doing on this duplex, after 6 months of owning the property. (seasoning)

  • Real Estate Agent · Claremont, CA · Member since 2015 · 10 posts · 3 votes
    7y

    Love it, when you post picture. before an after. keep up the great work

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