Newbie from Smithville, MO (Kansas City)

[Tara Jackson]

Hi! My name is Tara Jackson, I am very green in the REI world. I, like many people that I have talked to, got interested after reading Rich Dad, Poor Dad. I have been listening to BP podcasts, tuning into the webinars, and following the forms silently. I initially found bigger pockets through a google search on real estate investment and I recently became a pro member so I would have access to more of the features on the site. While these features will surely be helpful I have come to the realization that networking, live connections, and experience will be much more helpful! (Thank you @Chris Hopper for your post a couple of days ago re: beating dead horses, it really pushed me to make this post!)

I have been a Nurse Practitioner for the past 7 years and was a RN for many years prior to that. I love what I do, but looking to make some “passive” income and to start working towards financial freedom. I hope to reach financial independence in 10 years.

I am interested in the BRRRR method. I am halfway through David Greene's book, and I highly recommend it to anyone who has been considering purchasing it. I am open to partnering with another newbie interested in BRRRR or partnering with someone experienced with BRRRR. I would prefer to stay local, in the Kansas City, MO area, for my first several deals. I have already learned so much from the BP community. Any advice, suggestions, connections are appreciated!

[Nathan Roberts]

Originally posted by @Tara Jackson:

@Nathan Roberts Thanks for reaching out! Thus far I have been looking in Midtown and more recently near RMC (where I work). I would prefer a 3/1, but I am open to 2/1 if there is enough square footage to potentially add a third bedroom. I don't have a specific sqft criteria. All the properties I have looked at (via the web) would need rehab and I am definitely open to that. It's my understanding that you have to rehab or increase the value of the property in some way for the BRRRR method to be successful, correct?

That's correct, you make money when you add value by doing a rehab. If you don't force appreciation through a rehab, you can still do a cash-out refinance but most banks/firms will only do this up to a 70% - 80% LTV minus your current loan obligations and/or existing liens on the property. If you only put down 20% when you purchase a property, without doing a rehab, it wouldn't be worth it to do a cash-out refinance because you wouldn't have enough equity to pull out. I have two investor clients that plan to do a cash-out refinance or simply a refinance in a few years, then sell all properties in 5-7 years (optimal IRR) to roll into a 1031 exchange. They will then purchase a larger multi-family property instead of having multiple single-family properties (Economies of Scale). I hope this helps!