FIRE Realty noticed this particular property, a very large 2 bedroom home in a solid location. Typically, nice 2 bedrooms sell for $115K+ and this home had the sq. ft. of a 3 bedroom home. Also, in November of 2021, I knew home values would be higher in the Spring of 2022 to give the ARV even better comps. All to say, FIRE knew the home was undervalued and for some reason no one wanted it.
Typically, the next step of the BRRRR Method is Rehab. However, an inspection with Elevate Home Inspections reveals that the property was in “good enough” condition. The house will definitely needed some cleaning and updates for a turnover or resale, but we luckily already had a paying tenant. With that in mind, we were able to skip directly to the Rent portion of BRRRR.
FIRE met with the tenant who was an exceptionally nice lady and bumped the rent to $1,050. We didn’t feel the need to go in super aggressive with the increase, it wasn’t necessary. It’ll go to market eventually and we were more interested in maintaining a good relationship without turnover. The necessary Section 8 paperwork was sent in and approved for rent increase. Hopes were that the house would appraise for $100k+ or worst case scenario a little above purchase price. However, even then ROI would be very high.