New to Real Estate · Williamsport, MD · Member since 2021 · 11 posts · 6 votes
So I'm trying to decide on saving up to pay all cash for my first BRRRR or pay cash for the down payment and finance the rest. Obviously all cash would be best but that will take years of saving to do so. Is it worth it?
Also, house hacking that first BRRRR is a high possibility for me. Just wondering everyone's thoughts on house hacking my first BRRRR oppose to just saving up for the larger down payment if I don't house hack?
Rental Property Investor · Fairmont, MN · Member since 2019 · 184 posts · 123 votes
5y
@Andrew Ramirez I don't think it makes sense to spend several years saving up money to buy a property 100% with cash. When you can be into a property with only 20% (or less if you are house hacking). I'd much rather have 5 properties purchased with debt that cashflow $200/month each vs 1 property owned free and clear that cashflows $600/month for example. Overtime tenants pay off your debt for you and you will create significant wealth (equity).
However, you have to buy right and have reserves set aside for when things go wrong. Leverage (debt) is very powerful, it can make a person very wealthy over time, but it can also make you very poor very quickly if you over leverage yourself. Understanding how to analyze properties, find deals where the numbers make sense, and purchase properties for under market value. Good luck!
Rental Property Investor · Fairmont, MN · Member since 2019 · 184 posts · 123 votes
5y
@Andrew Ramirez I don't think it makes sense to spend several years saving up money to buy a property 100% with cash. When you can be into a property with only 20% (or less if you are house hacking). I'd much rather have 5 properties purchased with debt that cashflow $200/month each vs 1 property owned free and clear that cashflows $600/month for example. Overtime tenants pay off your debt for you and you will create significant wealth (equity).
However, you have to buy right and have reserves set aside for when things go wrong. Leverage (debt) is very powerful, it can make a person very wealthy over time, but it can also make you very poor very quickly if you over leverage yourself. Understanding how to analyze properties, find deals where the numbers make sense, and purchase properties for under market value. Good luck!
Rental Property Investor · Dallas, TX · Member since 2018 · 64 posts · 43 votes
5y
@Andrew Ramirez if you plan on house hacking, I don't think saving cash for a BRRRR is the best idea. Since it'd be your primary residence, you may get it for ~5% down. And if you do it the right way, you may have little to no mortgage expenses as the tenant would pay for it. Whether that's $500-2000, that's how much you'd be able to save quicker because you won't have housing expenses.
Investor · Mt. Arlington NJ · Member since 2018 · 251 posts · 143 votes
5y
Definitely house hack and build equity and wealth while saving for your next investment. You can get into a multi-family FHA with as little as 3.5% down or into a single family with 3 to 5% down depending on the loan product. Just make sure you thoroughly analyze the deals when shopping