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BRRRR? Are you cold? No, that stands for Buy, Rehab, Rent, Refinance, Repeat. Here is the story of my first real BRRRR. 

This is a real life example with real numbers. 

Property and Loan Details:

  • 3 Family
  • Location: Central CT
  • Purchase: $123,000
  • Rehab budget: $55,300
  • Down payment: $18,450 (15%)
  • Loan principal amount: $104,550
  • Total Loan (principal plus rehab): $159,850
  • Appraised as-is value: $125,000 (pre-rehab)
  • Appraised ARV: $255,000
  • Loan Terms: 9.99% for 12 months
  • Interest only payments each month
  • Points: 3.5


The hard money lender had a few programs. The one I elected was:

  • 85% of purchase and 100% of rehab
    • 15% down ($18,450)
  • Total loan must be 75% or less than the after repair value (ARV)
    • Appraised ARV: $255,000

Here is why my property worked for this program:

  • Appraised ARV value: $255,000
  • 75% of $255,000 = $191,250
  • Total Loan: $159,850 / $255,000 = 62.69%
  • 62.69% is less than 75% or $159,850 is less than $191,250

In case any of you are thinking hard money means loan shark, you would be incorrect. 

Everyone in the real estate industry has a purpose and these hard money lenders (HMLs) have a very important one. They provide quick turnarounds on financing for deals like this where conventional banks would months. We do not have that sort of time here. While they may have points up front and high rates, their goal is to help you succeed and, of course, make money while doing so.


Those were the numbers, which is only part of the experience. Here are some other things that i learned and the stories behind the lessons:

  • Always work with trusted, vetted contractors. If you are like me and doing a long distance rehab, this just got 100 times more important. For those of you that do not know, i am in TX and the property is in CT. More on this point later…
  • Always budget for contingencies. It is impossible to nail your budget down to the penny. Haven’t you seen those HGTV shows? There are always unexpected issues. 
  • If you are renovating an unoccupied property, make sure that when you’re done for the day it looks like the property is occupied. I learned this the hard way after half of my copper pipes were stolen, the other half were bent and damaged and one of my brand new windows was smashed in. This was a $5,000 mistake. 
  • When you are getting quotes do not just go with the cheapest one. I was accepting bids for a parking area expansion. I had about 50 people respond to the ad. Here is what happened:

Strike 1: I went with the cheapest guy who did it for about $1,500. There was also a dumpster in the parking area that he assured me he would dig out and place stone under. I mean think about those logistics. How are you going to dig out under a full size dumpster without moving it? I agree, this was stupid on my part for agreeing to this. He finished the job and sent pictures. The pictures were pretty good! Coincidentally, no pictures of the work around the dumpster. Nevertheless, fine, I paid him. Guess what? Turns out pictures were deceiving the parking are looked like complete hell. 

Strike 2: Price was $1,300, different guy and “far superior” stone and materials. It was great for 1 week. The area was packed down, no grass showing through and seemed to be fine. This time i was actually in the area and inspected it myself. It seemed great so i paid him. Everything was okay until it rained. After it rained it turned into a massive mud pit. I had to call tow trucks to remove stuck tenants. In fact, there was a time where the tow truck gave up due to such poor conditions. Can you imagine the angry phone calls I was getting? 

Attempt 3: The third guy did an absolutely incredible job. He dug out the whole area much deeper, used real professional machines and laborers and it has been a dream ever since. That cost was $5,700. If I had just done it right the first time…  

  • Remember the guy that was “strike 1” in the story above about the parking area? So he also agreed to refinish all of my wood floors for about $1,700. Jack of all trades, right? This property is 4,000 square feet with nearly all wood floors. Great price, right? Him and i agree to the job and he promptly “finishes” the job as he said he would and sends about a dozen pictures showing his work. The pictures look great! I am happy with the work and send the payment. Come to find out, once the floors dried, they looked horrible. There were polyurethane splashes and sander gouges everywhere.

Lesson: Do not rely on pictures, ever. If you are in the area, get off the couch and go look at it yourself. If you are too busy or not in the area, have someone go inspect the work. Pay someone to go inspect the work. It will be worth your time and money. Trust me. The only exception i have to this is my trusted general contractor who has done dozens of jobs for me and i trust him explicitly.  

Those were some of the stories i had from this job. Here is where i am at now. At the time of this writing it is April 2019. May 2019 will be 12 months which means i need to refinance out of this hard money loan and into something more permanent. I am well underway on the refinance already.

Last week i paid for an appraisal to be done on this completely renovated property. I have not received it back yet, but when i do i will receive a loan based on 75% of the appraised value. Here is how i am hoping the numbers work out.


Total amount to be paid off: $159,850

Appraised ARV: $255,000

  • This was done pre-renovation but is still a good number to use for projections.
  • Still waiting for my post-renovation appraisal

$255,000 x 75% =$191,250

$191,250 – $159,850 = $31,400

$31,400 – $10,000 (closing costs) = $21,400

At closing, i am hoping to receive $21,400 to fund my next deal.

Current Rental Income

I was able to rent this property after all of the interior renovations had been completed. My tenants were in place while some of the exterior items like the roof, siding and parking area were being worked on. Here are the specs on the rental income (utilities are not included):

Unit 1: $1,550

Unit 2: $1,600

Unit 3: $1,550

Garage: $75

Total gross income:

Monthly: $4,775

Annual: $57,300

Overall, even though i have not quite wrapped up this whole experience, i would say it has been an extremely positive one. I have a few other rentals but none required the extensive planning, renovations and forethought that this one did. I learned a lot of valuable lessons here that i will take with me throughout my real estate investing career. 

As always, if anyone has any questions about anything they thing i could help them with, please feel free to reach out! I am always willing to give my time to a fellow entrepreneur.