Closest BRRRR Alternative for New Investor

[Greg Smith]

Hi, everyone. I'm looking to purchase my first rental property in a location that is a can't miss. The problem is that the price of the homes most in need of repair is beyond what I can afford to pay with cash. I'm guessing lots of you have found yourselves in markets that aren't necessarily BRRRR friendly anymore due to increased home values.

I'd really appreciate any advice about how to best set myself up on my initial purchase using a more traditional financing approach to be able to leverage that property going forward. 

I'd obviously like to own multiple homes, so my biggest fear is getting all of my money tied up in this property and having to wait 3-5 years to do the next deal.

How have you guys navigated this? Any advice?

Thanks in advance.

[Jonathan Greene]

Why do you need to pay cash to BRRRR? The second to last R in BRRRR is refinance and that can mean out of your first FHA loan if you are house hacking or a modified conventional investor loan? Are you saying you don't have enough in the market for 20-25% down?

I advocate, for some, what I call reverse BRRRR which switches the first two Rs so it is Buy Rent Rehab Refinance Repeat, but this one is done better with cash or when you can leave your money in and banks on having a low price point with paying tenants and high appreciation potential if you just wait and leave it alone.

If you can't house hack, you will need to drop 20% down. If your target area is too hot, go on Google Maps and track 2 towns in each direction and drive them to see where the most activity is, the most dumpsters or flips to see which town may increase next.