BRRRR With a HELOC in Washington, DC

[Abiona Burrell]

Hi. I'm looking to acquire my first investment property with a Heloc for upfront costs using the BRRRR method in the Washington, DC area. I've familiarized myself with the process but wouldn't mind any other input or insights from those who have done it similarly.

[Russell Brazil]

BRRRR is going to mainly be possible in the following neighborhoods...Petworth, Brightwood, Riggs Park, Brentwood, Kingman Park, Anacostia, Deanwood, Columbia Heights, Brentwood, 16th St Heights, Shephard Park.

Understand your rental yields will be generally low after the cash out refinance, but you will have a highly appreciating asset. The rent can be juiced in certain neighborhoods using the section 8 program. 

BRRRR in DC does require large capital outlays. Even light rehabs in DC are $150k on a WW2 era house. The older houses typically going to be $200k plus on the rehab....plus the acquisition costs are also significant. Of the neighborhoods I mentioned, Riggs Park and Brentwood are probably the cheapest at $425-525k acquisition costs and a $150k rehab.