My First BRRRR Deal in Cleveland

Real Estate Deal Analysis & Advice
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My First BRRRR Deal in Cleveland

Mike Trzaska
Investor · Cleveland, OH · Member since 2014 · 55 posts · 48 votes

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $41,000
Cash invested: $89,000

This property was a BRRRR deal, completed during the midst of the COVID-19 pandemic. Renovations took twice as long as expected, but was able to stay on budget by using a great handyman and doing alot of work myself. Spent 2-3 nights per week at the property and a full weekend day for the better part of eight months, but it was all worth it.

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

Wanted to do a BRRRR as my first deal to recycle seed capital and keep momentum. House was owned by same family since 1920.

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

MLS. Was on market for 2 weeks in very hot market. l I presented a cash offer 20% lower than list right before Christmas, and settled slightly above my offer. Wrote a personal note to the family, explaining my plans for the home. Love house shopping in winter...

How did you finance this deal?

Cash - My Own

How did you add value to the deal?

Full renovation. House was listed as a 4/1. Added a bath to the second floor, as most homes in the area either only have one bath or second bath is below grade.

What was the outcome?

Perfect BRRRR. Refinanced all my investment out and rented for almost $200 more than I ran my numbers at.

Lessons learned? Challenges?

-It is my responsibility to build a process and timeline for my contractor to follow.
-Picking up tons of material from Home Depot is no fun. Have everything delivered in 2-3 drops.
-Should have started sooner.

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

Yes, Mark Deeter of Keller Williams

9Reply
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Most Popular Reply

Ryan Cleary
Investor · Palm Beach County, FL · Member since 2019 · 370 posts · 330 votes
5y

Hey Mike,

I must say that you are the first successful brrrr I have heard of in a long time and I am very impressed!

How much was your appraisal and cash out refi for?

2Reply
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15 Replies

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  • Frank Hinck
    Rental Property Investor · Minneapolis, MN · Member since 2020 · 540 posts · 285 votes
    5y

    @Mike Trzaska

    Great! Now you know all the steps and what took too long and what you can outsource next time, built your team, and onward to #2!

    0Reply
  • P Baxter Hudson
    Cleveland · Member since 2020 · 16 posts · 5 votes
    5y

    @Mike Trzaska nice looking exterior updates.  Did you paint the siding shakes or is that new, pre-colored vinyl shakes overlaid on the existing siding?

    0Reply
  • Mike Trzaska
    OP
    Investor · Cleveland, OH · Member since 2014 · 55 posts · 48 votes
    5y

    @Frank Hinck exactly. I'm actually under contract on #2 and #3. Should be less work than this one. Recycling that capital, the beauty of the BRRRR!

    1Reply
  • Mike Trzaska
    OP
    Investor · Cleveland, OH · Member since 2014 · 55 posts · 48 votes
    5y
    Originally posted by @P Baxter Hudson:

    @Mike Trzaska nice looking exterior updates.  Did you paint the siding shakes or is that new, pre-colored vinyl shakes overlaid on the existing siding?

    Thanks. I painted the exterior, new siding would have put me in trouble in terms of budget

    2Reply
  • P Baxter Hudson
    Cleveland · Member since 2020 · 16 posts · 5 votes
    5y

    @Mike Trzaska Painted - looks sharp.  Gotta love sweat equity.  Best of luck on the next one! 

    0Reply
  • Account Closed
    Rental Property Investor · Cleveland, OH · Member since 2018 · 61 posts · 27 votes
    5y

    @Mike Trzaska nice man, congrats! Huge accomplishment to get the first one under your belt.

    I am getting ready to begin my first. Would love to chat more about your experience prior to heading into mine

    0Reply
  • Ryan Cleary
    Investor · Palm Beach County, FL · Member since 2019 · 370 posts · 330 votes
    5y

    Hey Mike,

    I must say that you are the first successful brrrr I have heard of in a long time and I am very impressed!

    How much was your appraisal and cash out refi for?

    2Reply
  • Andrew SyriosPro Member
    Moderator
    Residential Real Estate Investor · Kansas City, MO · Member since 2014 · 10k+ posts · 5k+ votes
    5y

    Well done Mike, congrats!

    Podcast Guest on Show #121
    0Reply
  • Mike Trzaska
    OP
    Investor · Cleveland, OH · Member since 2014 · 55 posts · 48 votes
    5y
    Originally posted by @Account Closed:

    @Mike Trzaska nice man, congrats! Huge accomplishment to get the first one under your belt.

    I am getting ready to begin my first. Would love to chat more about your experience prior to heading into mine

     Happy to help. Shoot me a DM and we can talk more there. Biggest thing for you first is letting go of your  notion of perfection and just doing it. Run your numbers and make good decisions, but how I got myself to Move was by telling myself if I leave less than 25% in the property I’m more successful than just getting a bit and hold. Not to mention the learning and momentum you get from doing your first deal.

    0Reply
  • Mike Trzaska
    OP
    Investor · Cleveland, OH · Member since 2014 · 55 posts · 48 votes
    5y
    Originally posted by @Ryan Cleary:

    Hey Mike,

    I must say that you are the first successful brrrr I have heard of in a long time and I am very impressed!

    How much was your appraisal and cash out refi for?

    Thanks Ryan. Appraisal was for $128k, took out 96k which covered all expenses including loan closing costs. Now in full transparency, there is a lot of my own labor and time away from family not accounted for. 

    I also think the fact it took twice as long to Reno helped me because COVID took prices up which were accounted for in the appraisal. First time anyone probably said doubling a timeline helped them.

    My goal for the next BRRRR is to buy it even better on the front end and eliminate as much of my time as I can from the Reno.

    3Reply
  • P Baxter Hudson
    Cleveland · Member since 2020 · 16 posts · 5 votes
    5y

    @Mike Trzaska  Time, time, time.  Time not only in everything takes longer than planned, but your own time in blood, sweat, and many times tears.  You are very on point with acknowledging your own time involved with the project and it would be great if more folks included this element when discussing true 'costs' involved with turning a property. @Account Closed

    It is very frustrating to see all of the 'reno in 1 month', 'turn in 2 weeks' and whatever else nonsense that exists on TLC or internet YouTube-land of 'successful' BRRRR deal 'tales' told by those who may have SUPER EFFICIENT, well established teams already in place. For a beginner, the barrier to entry can be SUPER expensive.

    To @Ryan Cleary's point - great that you got a very favorable ARV and pulled all your scratch back out to roll into other deals.

     

    0Reply
  • Ondrej Brown
    Rental Property Investor · Cleveland, OH · Member since 2019 · 150 posts · 47 votes
    5y
    Originally posted by @Mike Trzaska: Congrats MAN . This property looks great, look like on the west side of Cleveland to.

    Investment Info:

    Single-family residence buy & hold investment.

    Purchase price: $41,000
    Cash invested: $89,000

    This property was a BRRRR deal, completed during the midst of the COVID-19 pandemic. Renovations took twice as long as expected, but was able to stay on budget by using a great handyman and doing alot of work myself. Spent 2-3 nights per week at the property and a full weekend day for the better part of eight months, but it was all worth it.

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

    Wanted to do a BRRRR as my first deal to recycle seed capital and keep momentum. House was owned by same family since 1920.

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

    MLS. Was on market for 2 weeks in very hot market. l I presented a cash offer 20% lower than list right before Christmas, and settled slightly above my offer. Wrote a personal note to the family, explaining my plans for the home. Love house shopping in winter...

    How did you finance this deal?

    Cash - My Own

    How did you add value to the deal?

    Full renovation. House was listed as a 4/1. Added a bath to the second floor, as most homes in the area either only have one bath or second bath is below grade.

    What was the outcome?

    Perfect BRRRR. Refinanced all my investment out and rented for almost $200 more than I ran my numbers at.

    Lessons learned? Challenges?

    -It is my responsibility to build a process and timeline for my contractor to follow.
    -Picking up tons of material from Home Depot is no fun. Have everything delivered in 2-3 drops.
    -Should have started sooner.

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

    Yes, Mark Deeter of Keller Williams

    1Reply
  • Kellan Martz
    Attorney · Los Angeles, CA · Member since 2015 · 65 posts · 51 votes
    5y

    @Mike Trzaska congrats - looks great. Do you mind sharing your handyman's info or know of one? I have a duplex under contract in East Cleveland and will be doing some minor repairs when it closes. I also have a minor roof repair and gutter repair that needs to be done. Thanks!

    1Reply
  • James Wise
    Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes
    5y

    Looks Dope

    0Reply
  • Dmitriy Fomichenko
    Solo 401k Expert · Anaheim Hills, CA · Member since 2012 · 18k+ posts · 6k+ votes
    5y

    @Mike Trzaska thanks for sharing!

    0Reply
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