How to execute BRRRR remotely? Looking for help getting started.
I am ready to begin the process to liberating myself from the 8-5. I have a plan in place and a set of fairly specific criteria in order to get there. Here it is at a glace:
* 3k in monthly cash flow = 15 properties at $200/month or 20 properties at $150/month. Am open to larger properties (such as 10-unit+ apartment complexes, etc.) but do not think I could currently qualify for a loan on such a property at the time of refinance (assuming BRRRR), even if I could find a private investor to make the original purchase for me.
* Looking at BRRRR strategy as a way to more quickly scale property acquisition due to limited capital
* Seeking private investor to assist with increased property acquisition as time progresses
* Ultimately seeking passive investments that require little to no attention which will provide income stream
* Looking to accomplish 3k of passive, cash flow income within the span of 3-5 years
I have a few obstacles as I perceive them. For one, I don't have a ton of capital. I have about 30k of my own money saved up right now. Turnkey is attractive, but I don't want to blow it all on one or two properties and then not have any cash to continue the process with while I continue to work another 1.5 years or so to save that amount up again. That would significantly delay the timeline in terms of achieving my goals. To that end, the BRRRR strategy seems most advantageous, to me, so that I could keep re-using the same chunk of money over and over. Furthermore, finding a private investor, or perhaps at first, using hard money, also sounds like a good option in order to scale property acquisition more quickly.
Another obstacle is that my town is not good for cash flow. Investors in the area tell me that you are doing well to get a property that cash flows 200 bucks after the mortgage payment, taxes, and insurance. They're not even including any variable expenses when they say this (vacancy, repairs, cap ex, property management). So unless I have stellar deals, investing in my own town seems like a poor choice given the landscape here.
Which leads me to my next obstacle; figuring out how to invest out-of-city/state. Sure, I can pull up the MLS and browse properties anywhere in the US, but there are so many places to choose from; I have literally no point of reference in terms of where to start. Furthermore, while deals can (apparently) be found on the MLS in certain areas, it seems to me that being networked with wholesalers and other investors in the area is a big deal in terms of getting good deals. So how exactly am I supposed to network with people in a remote location hours away from me? My first thought would be to figure out when/where the local REA is meeting and take a day or two off from work to attend and network... Other than that, I have no idea.
Finally, if I want to execute BRRRR in a remote area, I will need to figure out how to find/use subcontractors. I haven't even yet addressed this in my own town (figured out who I would use), let alone another area. This may be solved by networking as described in the earlier step, but it seems like another separate issue as well.
All in all, I feel like there are a lot of obstacles to overcome in order to begin on this journey. I need to be able to acquire at least 4 properties per year that cash flow at least $150-$200 after all expenses. And I can't do this in my own town, at least not readily. So I'm not entirely sure what the next step is at this point.
If I could purchase a property in my town for a price that would accommodate the rehab budget, and all other expenses, and leave me with $150 - $200 in cash flow at the end of the month, I'd be doing it right now. I have all of the resources and support system here in my town to make me feel comfortable with pursuing this immediately. However, on the properties that cash flow in my town (typically 50k and below SFH), there just isn't enough meat left on the bone. Capital expenses seem to be the killer here, since they aren't so directly correlated with income. So cap ex on the smaller properties takes a much bigger chunk out of the cash flow than on relatively similar properties in other areas with higher rents, and thus, a higher gross income.