I'm super excited to be posting in this forum. I'm eager to get started building wealth through real estate and I am in the middle of reading BRRRR by David Greene.
I own a house in the west side of Columbus, 43204 zip code. The neighborhood itself is nice but the surrounding areas such as the Hilltop are not very nice.
The house was originally appraised for 90,000 and the original loan was for 70,000. Since purchasing it a few years ago my loan payoff is now 63,000 and my lender says I have $54,000 in equity. This I’m sure is an inflated appraisal due to the market which they have at 117,000. It’s a 3 bedroom 1 bath.
My original plan was to live in the house and flip it with a buddy and then sell in spring 2021 and use my equity to get into a nicer area. My buddy bailed on me but left me all the equity. I’m still in the middle of DYI renovating and it seems to be never ending. Since the beginning I have learned how much money there is to be made being an efficient investor.
Since I did not pay for the house with cash I understand I cannot reap all the benefits of the BRRRR method. I want to get into rentals but I don't know if this house is in the right area. I want to sell the house but I would have to move back in with Mom in order to use my equity to purchase another property on top of saving the little bit of surplus I make at my job each paycheck.
I’m 25 young and naive. I want to change that, I’ve always struggled with sticking to the next big idea. I absolutely need to change that because I can’t keep living like this.
Any advice on what to do with the house? Or my next move?
Thank you so much for taking the time to read this.
Hi Paul, you could talk to a lender about a home equity line of credit (HELOC) and use that to help BRRRR properties, I think David even mentioned it in the book. This is a great way to tap into that $54k in equity without selling the asset. I plan to eventually use HELOCs to fund the initial purchase on BRRRR deals. I'm also located in Columbus so if you want to meet up and talk it through shoot me a message and we'll set something up.
@Paul Eckelberry I agree with Adrian. I would look into getting a HELOC and then rent your place out. You can get more out if you are currently using it as your primary residence. Then as soon as you rent your property out a lot of lenders will use 75% of that lease towards your debt to income.