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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  • Rental Property Investor · Tysons, VA · Member since 2015 · 73 posts · 45 votes
    7y

    Congrats! BRRR is the way to go for long run.

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

    It was in the Tri-Cities area of Hopewell, Petersburg, and Colonial Heights.

  • Newport News, VA · Member since 2016 · 28 posts · 12 votes
    7y

    Kevin Wilson, Congrats on your 1st deal. Glad to see someone doing the deed on here. I will say, NEVER...NEVER ever trust a word your contractor says. Check everything, then recheck it. DEMAND receipts for every item and insurance and license. I know this is basic but I trusted a "friend" and got really screwed. Once they finish, take the $400 hit and pay the home inspector to check all the work before final payment. This seems extreme but it's pennies once you find out the AC system is leaking all over and ruining stuff. 
        Spend the time to do things right and take care of your clients, they will most times save your *** if you treat them well and SCREEN well. Best of luck and keep us updated. Jeremy

  • Flipper/Rehabber · Louisa, VA · Member since 2021 · 2 posts · 2 votes
    5y

    This is amazing man, this definitely gives me hope. I can't wait to see what you do next.

  • Specialist · Richmond, VA · Member since 2018 · 9 posts · 2 votes
    5y

    @Brandon Spurlock nice going!  I'm targeting a Richmond neighborhood with all homes of a very similar footprint built in 1950, and I just saw a flipped one sell for 169k, after being purchased earlier in the year for $79k.  I really want to target more of them and work out how much the rehab is.  Really curious the breakdown of what you did and if you think you could do it even more efficiently your 2nd go round (other than the 4k direct hit!).  Sound like no roof on this one?  Cheers, sent you a connection request.  Reach out any time. Especially with management related things that you might need help with.  -ES

  • Rental Property Investor · Charleston, SC · Member since 2021 · 24 posts · 59 votes
    5y

    Although it costed you an additional 4K because of the contractors, you still have a home under your belt for only 4k out of pocket! Well done and congrats! 

  • Realtor · Richmond, VA · Member since 2017 · 118 posts · 113 votes
    5y

    @Ethan Sharrett thanks! Honestly, I had as inexpensive contractors as I've heard of. I think the only thing that could have saved me money was to do more homework on my contractors on the front end, to avoid having to fire one. And right, no roof on this one. A few years later, and I've only had to plunge a toilet a replace a section of gutter. Not too shabby.

  • Member since 2021 · 16 posts · 1 vote
    5y

    Congrats Brandon, I would consider that a smashing success.  Still looking for my first deal!

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