Project Summary

The Davidson Colonial House is a long-term rental buy-and-hold property located in Davidson, NC, purchased below market value with the intent to force appreciation through strategic renovations. The home was acquired using a 0% down VA loan. The clients lived in the residence for nearly two years, they decided to leverage their real estate investment expertise and transform it into a live-in BRRRR (Buy, Rehab, Rent, Refinance, Repeat) project. This approach would allow them to generate cash flow from the property, while using the proceeds to purchase a new primary residence in a better school district.

The client purchased the home for $360,000, from the original list price of $385,500. They invested approximately $20,000 in upgrades to the first floor, including a kitchen renovation with quartz countertops and subway tile with contrasting grout, an open floor plan to enhance the main living space, the installation of hardwood floors, and a renovation of the covered porch. The home’s location on an acre of land in the desirable Davidson zip code contributed to its appreciation over time.

The client refinanced the property after the renovations were complete to secure a very low interest rate, significantly reducing their mortgage payments and making the property’s holding costs affordable. With the upgrades made and the ongoing appreciation of the area, the client anticipates the property will command a competitive rental rate. Their goal is to generate positive monthly cash flow, build equity over time, capitalize on the area’s rapid appreciation, and avoid capital gains taxes when they eventually sell the home, as it was their primary residence for the required time period.

Financial Overview:

• Purchase Price: $360,000 (negotiated down from an original list price of $385,500)
• Renovation Costs: $20,000 in upgrades to the main floor
• Monthly Rent Cash Flow: As of April 1, 2020, the property is leased to tenants for $2,300 per month on a two-year lease. After property management fees, the client is generating $150 per month in cash flow.

Update – March 26, 2021: The client refinanced the property, reducing their monthly mortgage payments and increasing their cash flow to $343 per month. Additionally, the property has significantly appreciated due to the strong Charlotte housing market.

Final Sale Price: The clients eventually decided to sell this property. It sold for $585,000 on 4/4/2022 and they were able to roll the funds into another investment.

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Rental Photos