My wife and I own a single family home and have a great interest rate on our mortgage. We were also able to pay down all of our debt other than our mortgage, so we're ready to start investing! We thought it would be a good idea to take out a HELOC to put a down payment on a multi-family. I've heard a lot about using the BRRRR method or doing Air BNB with single family properties. Guess I'm just looking for some insight from people who have started out the way we plan to and have ended up doing well. Any insight is much appreciated!
Hi Greg (Placeholder?) If you're going to use a HELOC for the down payment you are going to be highly leveraged and taking on a lot of risk. Hopefully you also have actual, free and clear cash... if you don't, I'd wait until you do. (HELOCs are very expensive... they feel like cash but they very much are not.)
The toughest part of BRRRR is sourcing a BRRRR-able deal - something that is distressed and priced accordingly, but not too distressed. Is this something you're working on as well?
Standing by if you want to connect or have specific questions
Our plan is to have about $10,000 cash before we make a purchase with the heloc. Does that sound like a reasonable amount or would we need more to get going?
I'd like to do a BRRRR because it seems like the best way to make a profit and repeat the cycle. Is this a process you've done?