All Forum Posts by: Gorden Lopes

Some more before pictures

https://drive.google.com/drive...

Some more after pictures

https://drive.google.com/drive...

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $140,000
Cash invested: $42,000

Contributors:
Matthew McDermott, Jason Grey

One of the rare classic BRRR deals in Huntsville Class B neighborhood. Purchased it for 140K and although the house was in decent shape all the aspects of the house needed to be retouched making it a huge project. This is my 3rd long distance brrrr and the most satisfying given that its almost impossible to find BRRRR deals in Huntsville right now.

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

Great location (Class B), great value add opportunity and a rare BRRR opportunity in a class B area in Huntsville. This was a 5/2.5 house (3 bed/2 bad main floor and 2 bed and 0.5 bath in basement) 1650 Sq footage house which seemed odd and based on initial walk through we realized that the basement sq footage was not included and the real sq footage was 2450. And based on this Sq footage the ARV changed dramatically.

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

Found this off market through one of my local contact. The seller asked 142K and I negotiated to 140K and did not negotiate much since I thought there was a huge margin of safety at 140K itself.

How did you finance this deal?

Since this is a BRRRR deal I paid all cash.

How did you add value to the deal?

Did a complete kitchen upgrade with granite CT, new appliances, cabinet repaint. Converted the 0.5 bath in basement to a full bath so that 2 bedrooms downstairs will have a full bath access. Replaced flooring for the entire house with LVP. Opened up the wall between living room, kitchen and dinning area to make it more open. Replace the wooden plank walls in the 3 bedrooms with sheetrock to give it a more modern look. Painted the entire houses. Replaced the roof and lot more!

What was the outcome?

The rehab was completed in 3.5 months and my PM was able to rent it out for 1900 per month and currently in refi process, I am positive that this will appraise for at least 265k and I can get almost if not all my cash out plus a great house in a great location cashflowing at 350-500 per month.

Lessons learned? Challenges?

There are many most important ones are to make sure have checks and balances at each level. My PM had no skin in the game and since he was going to manage the property I asked him to check and made sure that there were no functional issues. Improvement wise, I think I was a little lazy in finding materials related deals around, luckily another investor friend was having a huge rehab as well and we teamed up to buy bulk LVP at a great discount.

Hey @Irish A.!

Congratulations on starting your RE journey! I am from bay area and have been investing in Huntsville for the past 3-4 years and it has been great so far.

DM me and I will be happy to share my referrals on investor friendly realtors and PM.

Although I agree that Hsv has seen great appreciation in last 3-4 years and "deals" are hard to find, I think there is still a lot of room left for growth in terms of rent appreciation and price as well. I have looked at other areas like Austin and Raleigh, NC and the numbers there are even more crazy plus the I was shocked to see the property taxes in places like Austin, freaking 5K property tax a year on a 230K OKish house. I would choose class B+ area of Hsv any day over class B- areas of Austin suburbs.

At least in Hsv, whoever is entering the market now, they can safely get 5-7% cash on cash plus a strong appreciation growth pretty safely, for many that is still a "Good" deal.

Totally agree! I bought my first investment property in Hsv 3 years back and have never stopped wondering why is not everyone seeing what I am seeing here. Great job and population growth, very low crime rate, super low property taxes, very land lord friendly and the list just goes on!

I am just glad that I did not miss the boat here after missing the bitcoin boom, the 2012 real estate boom and many more! :)

Thanks for echoing what I have been thinking for so long!

@Shawn Costley

Sorry could not join this meetup. Would love to know how did it go.

Hey @Dennis N.!

Thank you for your service to the nation and your service as a PM to OOS investor like me. I started my RE journey using you and your teams help. :)

Welcome to BP! 

Congrats @Gregory Schwartz on selling this duplex and buying a new property!

Completely agree with you on your observation that it is important to find market which also has appreciation and not just cash flow.

Did you manage the duplex by yourself or did you have a PM? 

Madison County REIA is very active and is a great place to network with other investors and vendors. I personally have met a lot of great contacts through their FB page. Hope it helps.