Just completed my 1st BRRRR in VA

Just completed my 1st BRRRR in VA

Realtor · Richmond, VA · Member since 2017 · 118 posts · 113 votes

Hey BP! I just closed on the Refinance portion of my first ever deal, a BRRRR. I guess once I "Repeat" then I would have actually completed the BRRRR process. For reference, I've listened to the podcast for about a year. In Summer of 2018, my wife and I took out a HELOC on our primary home in Richmond, VA, as it had appreciated in value greatly in just our two years of ownership. We opened the HELOC and sat on it so we'd have it ready when the time came, and in January 2019, got a phone call from a mutual friend who is a wholesaler in the area. We had met a few months prior, and he called to let me know he had a house under contract that was in the ballpark of my HELOC amount, and thought it may be a perfect first deal for me.

The process actually went relatively smoothly, except for having to fire a contractor. Essentially, he oversold his ability to finish the attic, was doing a poor job on drywall, and I had to fire him and hire a new guy. This swap in contractors cost me an additional $4,000. The house was a 900 sq ft single family with 2 bed, 1 bath and a walk-up unfinished attic. The main work done: refinished the hardwood floors, painted throughout, and finished the attic. Now it's a 3 bed, 1 bath, and 1250 sq ft.

Here are some numbers:

Purchase Price: $61,000 (paid for using HELOC)

Rehab Cost: $17,000 (paid with personal savings)

All-in Price: $78,000

ARV: $105,000 (based on appraisal from refinance process)

Rent: $1,000/month (Lease signed mid-project)

At the end of it all, I had to leave about $4,000 in the deal. The ARV wasn't quite high enough to get all my money back out when I refinanced, the fire/re-hire of a contractor hurt me a little, and the closing costs were higher than anticipated. But, for my first deal I'm thrilled, just got my my money back out, and will be looking for deal #2!

Some before pics:

And some after pics:

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Real Estate Agent · Richmond, VA · Member since 2012 · 15 posts · 9 votes
7y

Very cool. Thanks for sharing your success. I'm looking for a lender to refinance a rental property. Who did you deal with and how did that process work? Congrats good luck with number 2.

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  • Stephanie P.Pro Member
    Washington, DC Mortgage Lender/Broker · Member since 2016 · 4k+ posts · 2k+ votes
    7y
    Originally posted by @Brandon Spurlock:

    Hey BP! I just closed on the Refinance portion of my first ever deal, a BRRRR. I guess once I "Repeat" then I would have actually completed the BRRRR process. For reference, I've listened to the podcast for about a year. In Summer of 2018, my wife and I took out a HELOC on our primary home in Richmond, VA, as it had appreciated in value greatly in just our two years of ownership. We opened the HELOC and sat on it so we'd have it ready when the time came, and in January 2019, got a phone call from a mutual friend who is a wholesaler in the area. We had met a few months prior, and he called to let me know he had a house under contract that was in the ballpark of my HELOC amount, and thought it may be a perfect first deal for me.

    The process actually went relatively smoothly, except for having to fire a contractor. Essentially, he oversold his ability to finish the attic, was doing a poor job on drywall, and I had to fire him and hire a new guy. This swap in contractors cost me an additional $4,000. The house was a 900 sq ft single family with 2 bed, 1 bath and a walk-up unfinished attic. The main work done: refinished the hardwood floors, painted throughout, and finished the attic. Now it's a 3 bed, 1 bath, and 1250 sq ft.

    Here are some numbers:

    Purchase Price: $61,000 (paid for using HELOC)

    Rehab Cost: $17,000 (paid with personal savings)

    All-in Price: $78,000

    ARV: $105,000 (based on appraisal from refinance process)

    Rent: $1,000/month (Lease signed mid-project)

    At the end of it all, I had to leave about $4,000 in the deal. The ARV wasn't quite high enough to get all my money back out when I refinanced, the fire/re-hire of a contractor hurt me a little, and the closing costs were higher than anticipated. But, for my first deal I'm thrilled, just got my my money back out, and will be looking for deal #2!

    Some before pics:

    And some after pics:

    Great job!!  I can't believe you painted over that beautiful blue, green, yellow and magenta.  You're a monster!

    Stephanie

    PS   For the pictures, I think you have to save them in your computer, then rotate them and save the changes and they should post straight.

  • Realtor · Richmond, VA · Member since 2017 · 118 posts · 113 votes
    7y

    Thanks @Stephanie P.! The pics were oriented correctly I my computer. They show up straight on my phone, not on my computer, but now it's too late to update them. Better luck next time I guess!

  • Rental Property Investor · Tulsa, OK · Member since 2019 · 30 posts · 25 votes
    7y

    @Brandon Spurlock Great stuff here! What rate and term were you able to get on your refinance? I'm shopping for lenders now to complete the refinance stage of my first BRRRR in Oklahoma.

  • Rental Property Investor · Eugene/ Springfield, OR · Member since 2012 · 99 posts · 69 votes
    7y

    @Brandon Spurlock

    Great job! On to another!

  • Rental Property Investor · Charlotte, NC · Member since 2019 · 3 posts · 0 votes
    7y

    Great Job!! 

  • Realtor · Richmond, VA · Member since 2017 · 118 posts · 113 votes
    7y
    Originally posted by @Dakota A.:

    @Brandon Spurlock Great stuff here! What rate and term were you able to get on your refinance? I'm shopping for lenders now to complete the refinance stage of my first BRRRR in Oklahoma.

    I haven't stated it yet, so will here. My HELOC is a 100% LTV and interest-only for 15 years.

    My refinance was 4.75% for 30 years.

  • Rental Property Investor · Shakopee, MN · Member since 2015 · 985 posts · 374 votes
    7y

    I really like what you did here

  • Rental Property Investor · Windsor, CO · Member since 2018 · 26 posts · 21 votes
    7y

    @Brandon Spurlock maybe a dumb question, but I assume after the refi you fully paid off the HELOC so you have all those original funds reloaded and ready to go for the next deal?

  • Realtor · Richmond, VA · Member since 2017 · 118 posts · 113 votes
    7y
    Originally posted by @Darrin Taylor:

    @Brandon Spurlock maybe a dumb question, but I assume after the refi you fully paid off the HELOC so you have all those original funds reloaded and ready to go for the next deal?

    That's exactly it! I got all my HELOC money back and paying that down to a $0 balance, and almost all my rehab money (except for the $4k that I had to leave in the deal).

    Now my HELOC and savings are reloaded and ready to make the next opportunity.

  • fontana, CA · Member since 2015 · 8 posts · 1 vote
    7y

    @Brandon Spurlock congratulations I hoped to have my own post, for my first brrrr soon. what was your process was for finding a contractor?

  • Realtor · Richmond, VA · Member since 2017 · 118 posts · 113 votes
    7y
    Originally posted by @Jason Powell:

    @Brandon Spurlock congratulations I hoped to have my own post, for my first brrrr soon. what was your process was for finding a contractor?

    Finding a good contractor proved to be the hardest part. I found the first guy on NextDoor, he was super friendly, we connected well, he was flexible, and accommodating. The problem was, he was slow and had poor quality of work. I learned from that lesson to get verification of prior work and referrals.

    Next guy was a referral from my wholesaler, a contractor he had used on many occasions. All others were referrals from within the trade.

    All in all I met and interacted with 3 general contractors, 2 plumbers, 2 electricians, and 1 floor guy. I’m still not set on who “my guy” will be for the next deal, but I have some options and I know who guy will not be.

  • Realtor · Concord, NH · Member since 2017 · 48 posts · 30 votes
    7y

    @Brandon Spurlock 

    Congrats! Looks amazing! 

  • Rental Property Investor · Jacksonville, FL · Member since 2015 · 32 posts · 4 votes
    7y

    @Brandon Spurlock

    Congrats on your successful first BRRR deal!

  • Member since 2019 · 8 posts · 2 votes
    7y

    Nice work! 

  • Investor · Richmond, VA · Member since 2016 · 1k+ posts · 2k+ votes
    7y

    @Brandon Spurlock,

    Congratulations!!  You did a great job on the rehab!  Looks beautiful and you definitely added value!  The first one is the hardest/scariest, so now that you've got that under your belt, time to keep looking!  


    Hopewell (and all the tricities, but I understand it's not everyone's cup of tea) is a phenomenal place to have an investment property!      The proximity to Richmond, Fort Lee, and all the new development going on, movies being filmed there, new restaurants coming up, it won't be Church Hill, but I think it's very solid investment!  Congrats!    

  • Rental Property Investor · Hampton, VA · Member since 2015 · 29 posts · 5 votes
    7y

    @Brandon Spurlock

    Gorgeous!!!! Congratulations on the BRRRR. Best of luck on the Last R(Repeat)

    Real quick, what was the refi %? 70,75,80 or 85?

  • Realtor · Richmond, VA · Member since 2017 · 118 posts · 113 votes
    7y
    Originally posted by @Razak Amadu:

    @Brandon Spurlock

    Real quick, what was the refi %? 70,75,80 or 85?

    Refi was 75% LTV.

  • Real Estate Investor · San Francisco, CA · Member since 2014 · 104 posts · 21 votes
    7y

    @Brandon Spurlock again, great job!  Did you obtain permits?

  • Member since 2018 · 2 posts · 0 votes
    7y

    Congrats man, looks great. I am in Chesterfield VA and am looking to buy my first BRRR or buy and hold. Hopefully market will cool off soon.

  • Multifamily Syndicator · Houston, TX · Member since 2016 · 1k+ posts · 2k+ votes
    7y

    @Brandon Spurlock Congratulations on your 1st deal! 

    I particularly love this house because it's small and cute. I wonder how long the rehab took? 

    Also, I can appreciate the fact that you and your wife were patient by lining up the HELOC and pull the trigger when the right deal came along.

    Listening to the podcast and getting ready does help a ton, especially when starting out 👏👏👏

  • Realtor · Richmond, VA · Member since 2017 · 118 posts · 113 votes
    7y
    Originally posted by @Edwin L.:

    @Brandon Spurlock again, great job!  Did you obtain permits?

    I did not...and I should have. That was one big question mark, and I proceeded in the rehab before asking more questions. Probably a mistake on my part, but it did not effect the appraisal, which was my main concern.

  • Realtor · Richmond, VA · Member since 2017 · 118 posts · 113 votes
    7y
    Originally posted by @Ola Dantis:

    @Brandon Spurlock Congratulations on your 1st deal! 

    I particularly love this house because it's small and cute. I wonder how long the rehab took? 

    Thanks for the kinds words! Yes, the HELOC cost us $0 to open, so there was no reason to not get it opened and have it on standby. 

    Rehab took about 2 months from purchase until the tenant could move in. Again, we could have finished in one month, but the original contractor was slow, and then we had to go back over his work with the new contractor. Had I hired better up front, I could have saved a month of holding costs. All in all, not much harm done.

  • Property Manager · PA · Member since 2018 · 67 posts · 42 votes
    7y

    @Brandon Spurlock

    Congratulations man! The house looks great! (even if the pictures are sideways :p )

  • Multifamily Syndicator · Houston, TX · Member since 2016 · 1k+ posts · 2k+ votes
    7y
    Originally posted by @Brandon Spurlock:
    Originally posted by @Ola Dantis:

    @Brandon Spurlock Congratulations on your 1st deal! 

    I particularly love this house because it's small and cute. I wonder how long the rehab took? 

    Thanks for the kinds words! Yes, the HELOC cost us $0 to open, so there was no reason to not get it opened and have it on standby. 

    Rehab took about 2 months from purchase until the tenant could move in. Again, we could have finished in one month, but the original contractor was slow, and then we had to go back over his work with the new contractor. Had I hired better up front, I could have saved a month of holding costs. All in all, not much harm done.

    Yes, no harm was done for sure. 

    For what is worth, you learnt a lot and got money back! 

    Great win for a first deal!

  • Yorkton, Saskatchewan · Member since 2016 · 53 posts · 26 votes
    7y

    @Brandon Spurlock hey man, it looks to me like u nailed it. You got most of your cash out, have instant equity, great RTV and a property that will likely appreciate quite nicely.

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