BRRR Deal outside Huntsville

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BRRR Deal outside Huntsville

Colby Fryar
Investor · Tucson, AZ · Member since 2017 · 394 posts · 178 votes

Investment Info:

Single-family residence buy & hold investment in Huntsville.

Purchase price: $85,000
Cash invested: $85,000
Sale price: $140,000

This is a BRRR outside of Huntsville, which I obtained through my awesome broker there. I am expecting this to be my best BRRR ever in terms of cash flow and hopefully infinite returns.

What made you interested in investing in this type of deal?

My main interest in this deal was the neighborhood it is in. It has very good rents.

How did you find this deal and how did you negotiate it?

Through my awesome agent. We offered cash and a quick closing.

How did you finance this deal?

Hard money- in progress. Will let everyone know how this goes/

How did you add value to the deal?

Rehab- TBD

What was the outcome?

TBD

Lessons learned? Challenges?

Plan for more down up front.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

I recommend John White to anyone investing in the Huntsville area. He's awesome.

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  • Jay Bell
    Investor · Torrance, CA · Member since 2014 · 17 posts · 5 votes
    6y

    @Colby Fryar very interested to see how this one turns out... Will be following closely!

    0Reply
  • Colby Fryar
    OP
    Investor · Tucson, AZ · Member since 2017 · 394 posts · 178 votes
    6y

    Thanks Jay- I will let you know how it goes.

    0Reply
  • Scott Abernathy
    Property Manager · Murfreesboro, TN · Member since 2019 · 9 posts · 3 votes
    6y

    @Colby Fryar Looks awesome. Keep us posted.

    0Reply
  • Daniel MendezPro Member
    Investor · Dallas, TX · Member since 2018 · 254 posts · 47 votes
    6y
    Originally posted by @Colby Fryar:

    Investment Info:

    Single-family residence buy & hold investment in Huntsville.

    Purchase price: $85,000
    Cash invested: $85,000
    Sale price: $140,000

    This is a BRRR outside of Huntsville, which I obtained through my awesome broker there. I am expecting this to be my best BRRR ever in terms of cash flow and hopefully infinite returns.

    What made you interested in investing in this type of deal?

    My main interest in this deal was the neighborhood it is in. It has very good rents.

    How did you find this deal and how did you negotiate it?

    Through my awesome agent. We offered cash and a quick closing.

    How did you finance this deal?

    Hard money- in progress. Will let everyone know how this goes/

    How did you add value to the deal?

    Rehab- TBD

    What was the outcome?

    TBD

    Lessons learned? Challenges?

    Plan for more down up front.

    Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

    I recommend John White to anyone investing in the Huntsville area. He's awesome.

    Wishing you the best on this deal, Colby.

    Quick question, could you provide me the hard money lender that you used as well as John White contact information?

    Thanks in advance! 

    Let me know if you want me to just DM you

    0Reply
  • Colby Fryar
    OP
    Investor · Tucson, AZ · Member since 2017 · 394 posts · 178 votes
    6y

    I survived closing last week-  actually had a 2 separate closings but one was a refi on another property - I digress.  Closing with the hard money lender took a little longer than expected due to a number of factors- among them the holidays and a way low appraisal.  I was, however, able to successfully contest it.  We actually had 3 comps in the immediate area that were about $25K-$30K higher for the same size of sfr with similar features- post renovation.  We found out the appraiser was using pre-rehab numbers, which is interesting because those properties tended to be distressed sales like mine or quick cash offers. 

    It was definitely worth it. I only had to come out of pocket with only 10% down and that is for the purchase price and rehab. I'm not sure this is a sustainable approach going forward, however. Distressed sellers likely prefer quick cash closing which this was not. In any event, it is starting out to be a successful BRRRR. I will follow up with the rehab next and tell you about the smelly surprise my contractor found when he visited the house.

    0Reply
  • John Burtle
    Real Estate Broker · IL · Member since 2016 · 284 posts · 178 votes
    6y
    Following. Glad to see you closed and I'm looking forward to hearing about the progress!
    0Reply
  • Harsha G.
    Investor · SF Bay Area, CA · Member since 2017 · 27 posts · 10 votes
    6y

    Hi @Colby Fryar, looks like a great deal! How's the BRRRR going so far?

    0Reply
  • Colby Fryar
    OP
    Investor · Tucson, AZ · Member since 2017 · 394 posts · 178 votes
    6y

    @Harsha G. It's going fairly well- thank you for reminding me. I have been thinking I need to update the post. 

    Just to back up a bit-  the closing was extended a third time but it finally went through.  For all of you out there thinking about closing on a deal.  Keep in mind that once you have a signed offer, it is yours unless you decide to back out or can't fund the deal.  No one can come in and take it from you. That is why it is so important to lock the property up. In any event, the closing went through and the house is mine.

    Renovation is approximately 95% complete. I will end up spending about $5,000 more to get it done so I will have a bit more in the deal than I wanted to. My contractor is very busy with other jobs and it has been raining non-stop in Huntsville so that has been a challenge.  We expect to have everything ready for pictures this week and then my pm will advertise it to rent out.

    The biggest challenge on this one so far has been keeping the contractor going.  He has been bouncing between 2 to  3 different jobs, which was frustrating since I would put down a very large deposit and he would go to another job for one to two weeks.  The lesson for me is to definitely incorporate a contract with timelines to hold them accountable to the job.  All in all, finishing in a little more than a month is not so bad though.

    I am hopeful to get a good, quality renter.  This is a good neighborhood and rents are on the order of $1,200 for this size of house.  

    Harsha G. are investing here as well?

    0Reply
  • Harsha G.
    Investor · SF Bay Area, CA · Member since 2017 · 27 posts · 10 votes
    6y

    @Colby Fryar, congrats! How much do you think you'll end up spending total on the rehab? Did you find the deal through your agent or from a wholesaler and then put in your offer through the agent? 

    I am investing in the Huntsville area, currently under contract on two properties. One through MLS which should be fairly turn-key and one through a wholesaler that needs quite a bit of work. Excited to see how they turn out -- looking for other deals as well!

    0Reply
  • Gorden Lopes
    Rental Property Investor · Fremont, CA · Member since 2016 · 298 posts · 222 votes
    6y

    Congrats @Colby Fryar on this awesome BRRRR!

    The numbers look excellent! How much was your total rehab cost? And what zip code was this in?

    There are so many awesome areas just outside of HSV with great schools! You did a great thing by exploring those areas!

    0Reply
  • Colby Fryar
    OP
    Investor · Tucson, AZ · Member since 2017 · 394 posts · 178 votes
    6y

    @Harsha G.@Gorden Lopes Thank you both.  $23K on the rehab and I went through my agent.  I would be glad to refer him to you.  

    Harsha-  Wow- 2 properties! Good luck and please provide the details.

    0Reply
  • Harsha G.
    Investor · SF Bay Area, CA · Member since 2017 · 27 posts · 10 votes
    6y

    @Colby Fryar sounds like a great deal. I'll post updates once I close on the properties and get the rehab underway. 

    0Reply
  • Colby Fryar
    OP
    Investor · Tucson, AZ · Member since 2017 · 394 posts · 178 votes
    6y

    The rehab took longer than expected but my contractor ended up finishing up at the end of March.  It was well worth the wait and it came out better than I could have ever imagined. Here are the photos from the rental listing:  https://www.realtor.com/reales...  It rented last week for the target rent of $1,200/ month to a teacher so that is definitely a plus during these times.  The next step is to pay off the hard money lender- it's been tricky trying to find a bank to prematurely refinance before the seasoning period is up, especially with everything that's going on. 

    0Reply
  • Harsha G.
    Investor · SF Bay Area, CA · Member since 2017 · 27 posts · 10 votes
    6y

    @Colby Fryar congrats! How much total did you end up spending on the rehab? What do you think the ARV is now?

    0Reply
  • Colby Fryar
    OP
    Investor · Tucson, AZ · Member since 2017 · 394 posts · 178 votes
    6y

    @Harsha G. Hi Harsha I spent $23,800. ARV was $140,000- I think it is holding for now, but I will let you know what the bank comes up with as soon as I refi. The rent covers my loan payment really well but I still want to refi out of the hard money loan as fast as possible.

    0Reply
  • Harsha G.
    Investor · SF Bay Area, CA · Member since 2017 · 27 posts · 10 votes
    6y

    @Colby Fryar the home looks great, love the flooring! Did you have to do any major items like the roof or HVAC?

    0Reply
  • Colby Fryar
    OP
    Investor · Tucson, AZ · Member since 2017 · 394 posts · 178 votes
    6y

    @Harsha G. Thanks! Minor flashing, siding and trim repairs exterior. Ac is newer and roof is still in good shape. The contractor did a great job and it rented very fast.

    0Reply
  • Gerald ThitchenerPro Member
    Flipper/Rehabber · Vail, AZ · Member since 2018 · 10 posts · 7 votes
    6y

    Colby very nice! I'm glad you were able to rent fast on a distance property. Look forward to future updates.

    0Reply
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