If you are cash heavy, you want to use that to your advantage. Most ppl have to fish in the MLS/over priced wholesale pond. They have only 50k and they need the most financing leverage they can get. So they are stuck in a very small pond with a million rods in it. Getting the BRRRR to work from this pond is nearly impossible, and as you've experienced buying turnkey makes you question the cash flow over the liquidity.
There is another pond, but it's dangerous. Your moving cash around, sometimes without 100% vetting, but purchases will be under market. I'm talking auctions, foreclosures, short-sales, direct from sellers in dire need. This is the pond that the players fish in. Cash deals. Quick closes. Money being sunk into undervalued RE. The barrier to entry is the knowledge. Someone needs to know the market street by street. I mean school districts, parking, downtown, where the parks are, the restaurants and shops, colleges, even the good sections of the bad zip codes. Your end goal is to pick up an asset for 50% - 75% of it's current as-is value. Once the deed is in your name, you do a full inspection of the property to understand which of the 4 exits you plan on doing:
1) You don't lift a finger and add 20% - 25% markup and sell it to another investor who will take it all the way. You make an outstanding APR on a 3 - 5 month capital investment.
2) You decide to to a very light rehab, freshen it up, patch up any glaring issues, and you list it on the MLS for someone to buy as a cash flowing rental. Your return on cash will be 25% - 50% in 6 months, nearly a 100% APR. If it doesn't sell you can refi out FOR JUST YOUR MONEY BACK, nothing extra and keep it as a cash flowing asset you have nothing into.
3) You wanna flip it, so you can take the property to a lender who will put you in a delayed purchase Bridge loan and they will give you 80% - 90% of the purchase back, plus supply you with the rehab money to fix the house. You gain your liquidity back, but you'll carry the note for 6 - 8 months probably, but the return here can be substantial b/c you were in under market to begin with. This is the "going for it step". If you go for it, the conditions need to be right. That means mortgage rates need to be on a descending trend, the market the house is in has to be active, and the asset itself needs to be in a good school district and have a driveway and not be too far from downtown. A lot of the intangibles have to make sense. But when this step is pulled off from the bottom rung, the payday is huge. Last year, my partner in Pittsburgh bought a house at auction for 35k. He sold it untouched to an investor for 120k. Incredible school district, but no parking. So my partner opted for making a quick 85k and call it a day, but the buyer's lender did an appraisal and the ARV was 330k, but it needed 110k in work. So a 145k project cost with an ARV of 330k. You can't kiss that net. You can give it away at 250k and still do very well. These are the situations you will find yourself in buying this way. 44% project cost. The investors in that crowded pound are tickled pink if they snag a 75% project.
4) You know you want to keep this in your portfolio from get go, you go to the lender and do step 3 but instead of sell you do a DSCR refi but only take your money back. So in example above you would find a renter for like 2700 - 3000 per month, shouldn't be hard in that school district. You go to your Lender and you do a 45% leverage DSCR, which should have a great rate to it. Your monthly would be 1100 - 1300, maybe. You're in for 0 and collecting 1500/month. Now just add 9 more!
