112% BRRRR in Clarksville TN.
Investment Info:
Single-family residence buy & hold investment in Clarksville.
Purchase price: $77,678
Cash invested: $30,630
We purchased home via online auction for $77,678. Property was outdated. We are all in for around 109K. Net from refinance was around 122K so we came out 13K ahead. Rent scheduled at $1195. At 25% expenses, we'll cash flow $108 per month. At 50% expenses we'll be at around -$25 per month. Would ideally have just drawn to net zero cost, but wanted the capital available for our next project which closes 3/16.
What made you interested in investing in this type of deal?
After waiting to save up 20% a few times, we decided we wanted to increase the velocity of our acquisitions.
How did you find this deal and how did you negotiate it?
Deal was found at online auction. Auction closed twice with us as highest bidder but under reserve. Each time, it appears the bank lowered their reserve until we met it on the third go around.
How did you finance this deal?
Proceeds from HELOC laundered through two previous BRRRR's.
How did you add value to the deal?
Complete interior remodel.
What was the outcome?
Expected to be rented within the week for $1195 per month and 13K more than when we started.
Lessons learned? Challenges?
Always verify, contractor that had performed well previously delivered this project four months later after having issues with subs that split with overpaid progress payments. If I had kept a better handle on the general he would have had to have a better handle on his subs.