I am a beginner of real estate investment. First time to be here. Does someone have any suggestion for my situation? I brought 2 stories house in 2007 around 200k and paid off the mortgage in 2017. Because the job changed, sold my first property for 300k. I used 100k as DP to purchase a house as primary (with mortgage) and use 200k to buy my first rental property (no mortgage). In 2020 brought my 2nd rental (with mortgage). Using the cash flow, I should be able to buy a rental for every two years. I am reaching 60 years old. How can I increase my real estate investing pace? like some of you guys buy two or three rentals every year or each month.
Linear growth is slower than exponential growth. If you can BRRRR going forward, you should theoretically be able to pull some, most, or all of your initial capital depending on how good the deal is. You can start with 1 property a year for 2 years or so, and eventually that can become 2 properties a year in year 3, then 3 properties in year 4, and so on.
This is a very simplified version of the process without accounting for market changes or bad investments, but hopefully the example helps show how you can speed up your process.
Read Buy, Rehab, Rent, Refinance, Repeat: The BRRRR Rental Property Investment Strategy Made Simple Buy, Rehab, Rent, Refinance, Repeat: The BRRRR Rental Property Investment Strategy Made Simple by David Greene. It should help explain things a lot better. Good luck going forward.
Linear growth is slower than exponential growth. If you can BRRRR going forward, you should theoretically be able to pull some, most, or all of your initial capital depending on how good the deal is. You can start with 1 property a year for 2 years or so, and eventually that can become 2 properties a year in year 3, then 3 properties in year 4, and so on.
This is a very simplified version of the process without accounting for market changes or bad investments, but hopefully the example helps show how you can speed up your process.
Read Buy, Rehab, Rent, Refinance, Repeat: The BRRRR Rental Property Investment Strategy Made Simple Buy, Rehab, Rent, Refinance, Repeat: The BRRRR Rental Property Investment Strategy Made Simple by David Greene. It should help explain things a lot better. Good luck going forward.
I would advise refinancing and pulling equity out of the 200k cash purchase rental property. Use that money and start 1 or a few BRRRR's and scale up your units quickly.
@Michael Luo Even with a conventional cash-out refinance, most lenders will let you take 75% of your equity out. If your rental unit is still worth 200K and you own it out-right - you should be able to pull 150K out. With that, you could put 20% down on 3 more 200K properties (40,000 each) and still have 10K for reno and prep on each of the properties.
This is just broad strokes - and the devil is in the details - but it helps you see, as @Joshua Janus has explained above, how your pace can be accelerated. If you're able to actually use BRRR, as he suggests, the pace could be even faster and more consistent.
Hi Tim, thank you for your time to answer my question. You are correct. The devil is in details. Last time I checked with one lender, she told me I reached my income debt ratio and did not get the cash-out refinance. I checked the value of the rental property and it increased to 250k. Theoretically I can cash out 187k. The market is crazy right now and it is so difficult to find a good deal.