BRRR Investing in multifamilies strategy, holes?
Hi everyone,
Long-time lurker here, like many people Rich Dad Poor Dad got me hooked on RE over 15 years ago.
Unfortunately, I never put my plans into action.
As the title suggests, I'm planning on using the BRRR investment strategy in multifamily properties.
Here's how I plan to execute my strategy:
- Currently in the process of paying down some bad debts that we've accumulated, unfortunately.
- HELOC of around $50-70K will unlock capital to start investing
- First 3 houses will be bought with the aim of paying down my kids' colleges:
. House 1: Budget 300K - 10-yr mortgage
. No extra cashflow expected, goal is to build equity in the property to get son 1 to college with HELOC on equity in the property. He is currently 10 yrs old
. Timeline: As soon as debts are paid off (around 18 months to 2 yrs from now)
. House 2: Budget 300K - 10-yr mortgage
. No extra cashflow expected, goal is to build equity in the property to get son 2 to college with HELOC on equity in the property. He is currently 7 yrs old
. Timeline: 1 - 2 yrs after House 1
. House 3: Budget 300K - 15-yr mortgage
. Goal is to get daughter into college. She is currently 3 yrs old
. Timeline: 2 - 3 yrs after House 2
The idea is to spread this over time, allowing me to save some money and use the HELOC amount over and over again, to attain and keep properties
You will also notice that I'm assuming that their college tuition will cost 300K each. There's no telling of course how much it'll cost in 8, 10 or 15 years. Some forecasts say it'll continue to rise like it has in the past 10 years. Other forecasts say it'll fall. I'm assuming a marginal increase over the current rates, and anything extra can be financed via student loans.
After the first 3 houses:
My plan is to keep executing the same strategy over and over again with 15 - 20 yr mortgages to keep those properties to fund our retirement. Goal here is different, with some cashflow planned, to keep the ball rolling.
I'm currently 37 years old, and plan on working full-time throughout this process.
I'm quite handy, so will be doing some of the BRRRR work, but not all of it.
Where are the holes in this strategy, or are what details am I missing?
Do you see a better, more efficient way of achieving the same goals?