Salinas, CA · Member since 2020 · 51 posts · 34 votes
Hi All- I am in the process of refinancing my 2nd BRRRR. I'll be getting a check for roughly 68k. My goal is to buy 4 doors this year and double that number every year until I hit 15K monthly cashflow. Right now I'm at $750 monthly cash flow. How is the best way to scale from here? I can buy another SFH cash potentially and do another BRRRR. If I were to get a MFH, I would have to finance that and then BRRRR. I'd like to get one MFH this year, I just don't know what order I should do it in. Any tips would be appreciated!
@Adri Jusczak Your path will be based on your goals and situation. It may also be driven by what opportunities you find. What if you don't find a good 4-plex this year but you find an awesome #3 SFR investment? A bird-in-the-hand vs two-in-the-bush thing, right?
I am among those that believe RE investing is a marathon, not a sprint. Doubling your doors every year sounds pretty sporty to me. Sounds like you're doing well so far, just don't grow too fast and bite off more than you can chew. Don't get overleveraged, make sure you have accurately-calculated cashflow on all your properties and be smart and deliberate with your acquisitions.
@Adri Jusczak Your path will be based on your goals and situation. It may also be driven by what opportunities you find. What if you don't find a good 4-plex this year but you find an awesome #3 SFR investment? A bird-in-the-hand vs two-in-the-bush thing, right?
I am among those that believe RE investing is a marathon, not a sprint. Doubling your doors every year sounds pretty sporty to me. Sounds like you're doing well so far, just don't grow too fast and bite off more than you can chew. Don't get overleveraged, make sure you have accurately-calculated cashflow on all your properties and be smart and deliberate with your acquisitions.
hey @Adri Jusczak, I'd agree with Dave G here. Set your search criteria for a 4-plex that works for you, but still keep an eye out for a SFH that could work, too. Whichever comes up first should be the one that you go with. Just make sure you are hard on your numbers. Eventually your equity in your SFRs will be a huge help, but if you put off buying them because you're waiting for the perfect 4-plex, then you are losing out on equity and appreciation. And buying a house (or a new house) for yourself could be a great option too. Only putting 5% down and getting a rate that should still be less than 4% while still keeping a lot of your cash free for another rental would be a great move. Repeat that once a year if your lifestyle allows for it. Or better yet, do a house hack with whatever 4-plex you find and live there for a year. Hopefully that would still leave you with cash to do another deal while you live there.
I will echo the other commenters, I think the goal of doubling is ambitious and something that is not easy to do.
I find that investors I talk with miscalculate how much time and effort it is to scale like you are talking about without carefully planning, and deliberately expanding logically. I think moving to the multifamily space makes sense eventually, just be sure to not take up too much of your broadband. Congrats on your success and best of luck continuing it!
@Eric James good point. But isn't a seasoning period also potentially a good thing for a newer investor by forcing them to accrue actuals and experience some reality before moving onto the next project?
@Eric James good point. But isn't a seasoning period also potentially a good thing for a newer investor by forcing them to accrue actuals and experience some reality before moving onto the next project?
Could be. But if someone messes up a brrr that in itself will probably slow them down.
Thanks all! I'll keep my options open. Buying SFH with cash and refinancing has been a simple process so far, but I will keep funds available for the right MFH if it comes along. I have some lofty goals for 2022, but willing to put in the time and effort to make them happen.