Earlier I discussed why it’s a good habit Find profits in your backyard instead of going far I’m looking forward to the big end of the rainbow score.
Now, to show that I’m not blowing smoke (some Bigger Pockets readers even suggested I’m “naive”), I’d like to share a recent deal that shows exactly how. increase. Expanding the Washington, DC Area — Find deals. It is also an opportunity to show that finding small fish swimming in large ponds is essential to success in any market.
Very often, I’ve seen investors move in the opposite direction. They find the most famous home in the neighborhood, repair it, and add additional features. Suddenly, they got the most luxurious property in the area and couldn’t understand why no one would pay their demands or settle for a ridiculously high rent.
As the old saying goes, water finds its own level. So, if possible, enhance your fortune with the quality of your neighborhood, rather than trying to lift others with you.
Great in a highly competitive market
This house was a great discovery on several levels. First, it is in the immediate vicinity of several shopping and recreation centers. Second, it is within walking distance from both bus and subway lines. This is useful when you live in the Washington DC area.
The property is a Nagaya (also known as a townhouse) located in the neighborhood of gentrification, which is rapidly increasing in quality and popularity. Originally, it was a 3-bed / 1-bath house that had been abandoned for quite some time and was in desperate need of some real rehabilitation. The last piece of the puzzle was that the owner was very motivated.
The house is a perfect example of a small fish. It was far out of date, less than any other home in the neighborhood, nor even the more discerning buyers and borrowers of today. But with solid design work and proper TLC, it was clear to me that this ugly duckling could be turned into a beautiful and informative swan.
(See the photo at the end of this article that shows what the house looks like when I first saw it. Believe it, it was in a really bad condition.)
After several rounds of negotiations, we were able to acquire 123BRRRR Street for $ 350,000. Examining other homes in the area, we found that we could significantly improve the interior and exterior of the property, with an estimated repair value (ARV) of $ 650,000. Of course, it takes $ 150,000 to get there, but before we talk to the first tenant, it’s still $ 150,000 in built-in capital.
For readers who don’t live in expensive markets, these numbers may seem absolutely insane (especially after looking at the current photos). Sadly, that’s the way it is done in these parts of the country.
Well, 123 BRRRR Street wasn’t just your typical new counter, new appliances, several paint coats, and flower beds. Correct and flip.. She needed a little more than standard to strengthen her to a big fish suitable for others in her neighborhood. One thing we could do right away was to completely redesign the interior and change this modest 3/1 to 4 / 3.5.
Here is a brief list of the improvements we have made:
- I moved and made a new kitchen.
- Created a new master bedroom and bathroom suite.
- We removed the main walls on the 1st, 2nd and basement floors to open up the house and allow us to add another bedroom and 2.5 baths.
- We provided the kitchen with everything we needed to attract residents, such as stainless steel appliances, granite countertops, and ceramic tile floors.
- Hardwood floors were installed throughout the typical area and high quality carpets were laid in the bedrooms.
- We painted the exterior and created an attractive landscaping to maximize the curb.
From the first look to the last nail, this project took four months. It was a little longer than usual, but with so many additions and other big improvements we wanted to do it right. And it paid off brilliantly.
(See the photo below to see for yourself what happened.)
I’ve already explained that the house’s current capital is over $ 150,000. Remember saying that one of my biggest sources of profit is gratitude for me? And you did a great job when you could force gratitude and instantly add huge fairness to your deal.
This house wasn’t inside out.It falls in me BRRRR Philosophy— A philosophy that maximizes both worlds. Gain immediate equity, immediate cash flow, and long-term valuation potential. This was done by renting a property for $ 4,500 per month.
I’m not sharing this with you to brag — it’s far away. But the point is, when you hear something like “There are no good deals in my area …” or “You have to be a thousand miles away to make money …”, that’s not the case.
I found this and many other diamonds at my feet in one of the most expensive markets on the East Coast. And if I can do that, you can do it too!
There’s a lot more I can say about this and all the deals I make, but I haven’t written a great American BRRRR novel here. Please come back soon, and I will share more with you some of my secrets and tips. Let’s talk about Section 8 and high profitability.Share 10 maximum flipping and BRRRR points that investors can’t buy No To know. And more!
Please speak immediately.
123 BRRRR Street: Before and after the photo
Do you have questions about this purchase or rehab?
Please leave it in the comments below!