Better method- Low Down Payment or BRRRR

[Drew Smith]

Hi all,

New investor here. I currently live in Seattle and am looking to invest out of state where my money can go further. So far, I've mostly been focusing on my education by reading and listening to podcasts. 

I have some money saved up and planned to use that to BRRRR a du/tri/quadplex. However, I was listening to episode #448 of the bigger pockets podcast last night. They talked about getting a loan with 3% or 5% down; then you won't get much value by BRRRRing since I won't have much cash equity in the property. The obvious Con is higher mortgage payment + mortgage insurance. Any other thoughts on which strategy makes more sense? Looking forward to connecting

[Michael Haas]

Thanks for the kind words and reccomendation @Chace Fraser!

What's your experience level with investing in real estate and renovating properties @Drew Smith ? HouseHacking is an extremely effective strategy in the Seattle market, and the ROI #'s can go toe-to-toe with most out of state investments.

One major difference is that Househacking is a great beginner strategy, but BRRRRing is not. Think of a BRRRR like a trying to do backflip on ski's - not something you want to attempt before you 1. learn how to ski and 2. learn how to do a backflip. The BRRRR is the process of putting real estate investing together with rehabbing properties, and in your case combining that with Long Distance Real Estate Investing as well. I would not recommend trying this strategy until you have some long distance real estate investments and some rehabs under your belt individually.