Using leverage to BRRRR

Using leverage to BRRRR

Member since 2023 · 2 posts · 0 votes

Hi everyone, my name is Marshall Snyder and this is my first post on bigger pockets. I am an 18-year-old in Indiana and I am a 50% owner of two SFH's with the other 1/2 being my father. I also personally hold about 110 Solana and 150 Avalanche (these are two types of cryptocurrencies). I know I know this isn't the place for crypto talk but it is part of my capital. I am pretty new (as is any person who is in their teens still) but I am super ambitious about my real estate dreams. I absolutely love this community and have been working through about a dozen books or so from Brandon Turner's books to Ken McElroy's books and I absolutely love them. Currently I am not cashflowing with the two properties because I am on a huge loan and I only have a small amount of equity in the properties. My dad isn't a real estate investor he is just a very wise business man and wants to help me achieve my dreams. I have told him how ambitious I am and he isn't for me taking on much more dept because it is all from him and his company who loaned my what I owe. I could go on and on but now you know a little about me and I feel like i can ask my question now. I have a very good agent. So good he might just be a rockstar. But I have told him that I am low on money right now and he has offered to help me with leveraging. I was wondering what all your thoughts were on that. Obviously this is a huge risk but I am working really hard to make my decisions as logical as possible keeping emotions as far away as I can. I love the idea to use leverage but I want to be extremely wise and methodical. What are your guy's opinions?

Also I must add that I didn't BRRRR with the two properties that I have because it would be extremely hard to get my dad on the same page as me but I will be doing that with any other properties that I have that are completely under my name.

Thank you all! you guys are awesome:)

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  • Member since 2019 · 144 posts · 93 votes
    2y

    You need to tell us what your " Rockstar Realtor " suggest. There are ways to leverage but without credit score and without capital the only way is a track record and experience in real estate related trade.

    1. Build your credit score - learn how to use it

    2. live frugally and save every dollar

    3. Get a real estate related job, become an agent / wholesaler if you like talking to people and don't mind that the first years will be though and rejections are the norm, mortgage loan officer if you like numbers and like to be in an office enviroment, become a contractor if you like to be hands on. Electrician, Plumber, general contractor ... you get the idea.

    4. Depending on your saving and job , start with 1 property which you either flip, rent out, airbnb or whatever you want. The most important is that you don't buy the first property for yourself because it will kill your credit score, your income, your savings and your future income. If you buy a property for yourself , the property owns you, not you owning the property. If you get this right you will power charge your later steps. 

    5. Rinse and repeat the process above but keep learning other ways to invest, you can not do all flips because this will be taxed heavily, if you build to many airbnbs you will run out of cash, despite having good cashflows, if you do to many single family houses for regular rents, you have to wait few years to get a big payday and you barely cashflow. 

    There is no quick way to make money in real estate. Even getting ready to flip, the experience behind a flipper is at least few years in real estate before someone can flip properties in 2-3months timeframe. So it's good to ambitous but be patient. Real estate is build over long time.

  • Member since 2023 · 2 posts · 0 votes
    2y

    Thank you so much for your impute. I started building my credit as soon as i turned 18 and i have about a 700 credit score right now. I have been considering to get my realtor license for monetary gain, connections, and access to the MLS but I'm not 100% sure if I should start that now or later.

  • Member since 2019 · 144 posts · 93 votes
    2y
    Quote from @Marshall Snyder:

    Thank you so much for your impute. I started building my credit as soon as i turned 18 and i have about a 700 credit score right now. I have been considering to get my realtor license for monetary gain, connections, and access to the MLS but I'm not 100% sure if I should start that now or later.


     Good credit score. The first thing is accomplished. But you need a sizable income too to qualify for loans. Your Income needs to be 3x the amount of the mortgage + tax + insurance you want to buy. 

    The answer about timing is this. Have micro urgency and macro patience. Means what you can do today to today and becoming a millionaire be patient on that because if you have micro urgency you will become one by 25-28. So be patient on that regard.

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