Would you do a BRRRR on your first investment?

Question

Hello I wanted to get some general feedback since I am new to real estate investing. I have saved up a substantial amount of money and I am able to put a down payment on a property as well as pay for rehabilitation costs. I’ve partnered with a much more experienced investor to help me get started.

My question is would you BRRRR on your first deal? Would you go the finance route or wait until you can pay cash?

My question is would you BRRRR on your first deal? Would you go the finance route or wait until you can pay cash?￼

Martin Neal · Answer

@Kris Marmol I would definitely BRRRR on my first and technically, I did. It really helps to get some experience with the overall investing process. If you do it fairly decently, you can avoid having to invest 25% with the traditional financing method.

Joel Thompson · Answer

@Kris Marmol there are bound to be wholesalers from that area on BP. If I was in your position, I'd search them out, get on their list, then make a long weekend trip out there. Drive the areas you're considering investing in, walk on to jobsites, meet builders, contractors, investors, maybe plan your trip while a local REI meet up is taking place.

That's just my $0.02, I at least like to know the lay of the land before I invest there.

Joel Thompson · Answer

@Kris Marmol if you buy the property with cash you can still use hard/private money for the rehab. There's a good chance you could get a "zero down" loan to fund the rehab in the case that you own the property as well.

What area are you looking at for your first project?

Kris Marmol · Answer

@Michael Kiley Yeah I am almost completely through it. I’ve also read his other book on long-distance investing which is great. He does mention saving up enough cash to buy the property for your first one however of course there are a few methods of acquiring a property with minimal down and having a hard money or private money lender on the property for the first mortgage and then refinance it with a conventional loan.

Frank Wong · Answer

I would not BRRRR out of state on my first deal.  Way too much to do for your first deal.  It could something simple, like floors and paint and maybe a new kitchen counter.  That is very doable, but to completely redo the house new kitchen, floors, bathrooms, etc.  That's a lot for a first deal OOS but it's up to the individual and for themselves to decide. Know your risk.

Tony Gunter · Answer

@Kris Marmol

Sure, why not? It’s just another exit option.

My first non-house hack was a BRRRR.

Redha Laafia · Answer

@Frank Wong why wouldn’t you recommend BRRRR if not local?

Kris Marmol · Answer

@Joel Thompson That’s a fantastic idea Joel, I should definitely try to find some wholesalers out there. I’m connected with an agent who has several wholesellers working with them. Also I will be touring the area in July. We have a plan to lock down a few different neighborhoods to canvas but I like your suggestion about finding the contractors and jobsites.

Joel Thompson · Answer

@Travis Henry that's too funny!

What part of Tennessee?

Travis Henry · Answer

@Joel Thompson Such good advice! I'm flying out to Tennessee tonight to do just what you recommended before we look into BRRRing anything there. By the way, based on your photo and "Rain City Capital" I could've sworn your name was Macklemore.

Would you do a BRRRR on your first investment?

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