Investment Info:

Single-family residence buy & hold investment.

Purchase price: $75,000

A 2,568 sq ft 5 bed / 2 bath in South City St. Louis hit the market at $165,000. It sat. Price drop. Sat again. Another drop.

The sellers had inherited it from their father after he passed, and they wanted nothing to do with it. Not the house, not the contents, not the process. The place was still full of his belongings.

I offered $75,000 cash. They accepted on one condition: I handle clearing everything out.

Done.

Here's how the deal shook out:

-Purchase price: $75,000
-Renovation: roughly $85,000
-All in: about $160,000
-Appraised value: $282,500
-Market rent: $2,700/mo
-Cash-out refinance at 70% LTV: $197,750

I pulled back my entire cost basis plus extra, and the property still carries a DSCR that underwrites comfortably.

Two things made this work, and neither one was luck.

First, motivated sellers are rarely motivated by money alone. These sellers wanted the problem gone. I made myself the easiest exit, took on the cleanout nobody else would touch, and got paid for the friction. Watch the stale listings. Read the situation behind the price drops. Solve the seller's actual problem, not just their price.

Second, the refinance is where a BRRRR lives or dies. You can buy right and renovate right and still get stuck if the exit financing doesn't cooperate. Appraised value, rent, and leverage have to line up before you ever write the offer, not after.

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

I was able to get a great purchase price from jaded sellers and the property itself had great bones. You could tell the long time occupant who passed away took great care of things but it was in desperate need of a makeover.

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

It was sitting stale on the MLS.

How did you finance this deal?

Private Money Loan for the purchase and rehab and then refinanced into a 30 year fixed DSCR loan.

How did you add value to the deal?

We did a full $85k rehab.

What was the outcome?

I got a $282,500 appraised value with only about $160k in total cost basis!

Lessons learned? Challenges?

If your offer doesn't feel mildly disrespectful then it's not low enough! I also saved significant money on trash out by having an antique store owner come and take anything he wanted. He nearly cleared out 1/2 the house for free.