FIRST BRRR Complete! Details + Pictures!

301 Replies

@james Thanks for sharing your story. I love it! I'm looking to try the BRRRR method myself very soon. You having to call 30 banks to refinance makes me nervous, but sets my expectations. Wishing you continued success.

Della

Originally posted by @Johan Yang :

@James Gates Congrat on your success!! and thank you for sharing. Do you happen to know if the lender you are using is also serving outside AL? My business partner and I have two rental properties in FL that we paid all cash (free and clear). Now, I wanted to do cash out refinance on both of them. I will private message you.

Question about your partnership where both name on the title ("some we are both on Title (if we both put up 50% of purchase + rehab costs)"). Did your partner contribute something else beside 50% capital which you also put up the same amount? It looks like you were the one who did all the work from finding the deals to managing the rehab, etc... And, do you self-managed all your properties?

Thanks.

 PM me if you are looking for a lender! This lender is based out of Cincinnati, and they lend in most states. 

For the first property I put in half the cash and did most of the work managing the rehab, but I needed a partner to come up with the rest of the cash. I didn't have any rental experience so a 50/50 equity split made sense at the time. 

We do not self manage any of the properties. We have a boots on the ground professional property management team (and would highly recommend it!)

Originally posted by @Jonathan Pe :

@James Gates

Hey James, I just downloaded the BP app today so very new to it. What does BRRRR stand for?

I love in San Diego and plan on doing something similar in Utah or North Carolina.

Thanks.

Jonathan

BRRRR Stands for

Buy

Rehab

Rent

Refinance

Repeat

It is an amazing powerful real estate strategy because it allows you to cycle through your investment capital over and over while building long term wealth.

Here is a primer to the BRRRR Investment Strategy.

Originally posted by @Mario Leon :

@James Gates great example. I am new to BP and still learning. Stories like this show me it’s possible.

Question; How long before your spouse was supporting of your desire to invest in RE?

 Hey Mario,

Great question. It took some time, but we both became more and more interested in Real Estate as we saved for, looked for, and purchased our primary residence. She was 100% on board with real estate investing as soon as we got our own home. That was very important to her (and me as well), and we were on the same page that we would save for a 20% downpayment on our own residence before we would invest. Luckily I found out about the HELOC strategy on one of the podcasts, and we were able to do the best of both worlds!

Congratulations @James Gates ! Thank you for your in depth story. I always love hearing about people's hard work and determination. I too got my first investment property from a HELOC and I think that's a great way to get started. Awesome story and congrats again. Best of luck to you in achieving your financial freedom!

@James Gates Thank you so much for sharing, comments like this really help for those of us just getting started. Are there books or points of information that you utilized, specifically, to help you better understand the BRRRR process?

@James Gates this is awesome. I have been exploring BRRR's in Montgomery and Birmingham , do you think there are opportunities for multifamily (4+ units) BRRR's in the Huntsville market? Do you plan on traveling anytime soon? I'm just south of you in LA and pass through Redlands often on my Big Bear runs.

@James Gates that’s fantastic and inspiring, congrats! I have family living in Huntsville and you’re right about the growth (and also about the schools in Madison), so I may have to consider it a little bit more.

@Bradford Hancock here’s a little morning motivation for us

Originally posted by @Derrek Pantelli :

@James Gates Thank you so much for sharing, comments like this really help for those of us just getting started. Are there books or points of information that you utilized, specifically, to help you better understand the BRRRR process?

David Green's Book on Out of State Real Estate Investing would be the first book I'd recommend if you are interested in BRRRR. I also heard a rumor he is coming out with another book this year...

Originally posted by @Clarence Johnson :

@James Gates this is awesome. I have been exploring BRRR's in Montgomery and Birmingham , do you think there are opportunities for multifamily (4+ units) BRRR's in the Huntsville market? Do you plan on traveling anytime soon? I'm just south of you in LA and pass through Redlands often on my Big Bear runs.

 Hey Clarence!

The multifamily inventory in  Huntsville, from what I have seen, is very scarce. I have a friend who focuses on multi-family and he does a lot more business down in Birmingham. 

For traveling, I will be heading to Huntsville in two weeks to perform some due diligence on an off-market deal. Next time you are passing through Redlands on the way to the mountains let's grab coffee and talk Real Estate!

Hi James,

I have a quick question after reading your first BRRR property acquisition. What do you mean by the "seasoning period"? Also, when it was time to refinance, what does the lender requires from the borrower?

Your story inspires me to do the same as I am in the process of moving to Hawaii!

Originally posted by @Khai Nguyen :

Hi James,

I have a quick question after reading your first BRRR property acquisition. What do you mean by the "seasoning period"? Also, when it was time to refinance, what does the lender requires from the borrower?

Your story inspires me to do the same as I am in the process of moving to Hawaii!

 Hey Kahi,

If you are going to get a conventional loan during the refinance (which generally have the best rates and terms) most lenders will require a 6-12 month "seasoning" of the property. What that means is you need to wait a least 6 months before you can do at a cash-out refinance at more than the purchase price. If I would have tried to get a refinance during month 3 for example, the lender would have been forced to use the purchase price (60K) as the value of the house instead of the appraised amount (105K). 

When it comes to what does the lender require from the borrower, one word, paperwork. The bank will want to know everything about your financial situation, all your insurance documents, lease agreements, etc.

Originally posted by @James Gates :
Originally posted by @Johan Yang:

@James Gates Congrat on your success!! and thank you for sharing. Do you happen to know if the lender you are using is also serving outside AL? My business partner and I have two rental properties in FL that we paid all cash (free and clear). Now, I wanted to do cash out refinance on both of them. I will private message you.

Question about your partnership where both name on the title ("some we are both on Title (if we both put up 50% of purchase + rehab costs)"). Did your partner contribute something else beside 50% capital which you also put up the same amount? It looks like you were the one who did all the work from finding the deals to managing the rehab, etc... And, do you self-managed all your properties?

Thanks.

 PM me if you are looking for a lender! This lender is based out of Cincinnati, and they lend in most states. 

For the first property I put in half the cash and did most of the work managing the rehab, but I needed a partner to come up with the rest of the cash. I didn't have any rental experience so a 50/50 equity split made sense at the time. 

We do not self manage any of the properties. We have a boots on the ground professional property management team (and would highly recommend it!)

Hi @James Gates,

Congrats on the success! I noticed that you mentioned your lender was based out of Cincinnati and it sounds like you had a good experience. I live in that area and was curious what company it was?

Thanks for taking the time to share your experience so we can all learn!

@James Gates : you mentioned $3k in refinance fees, correct? It is astounding that it's that much. Basically, you pay someone $3k to walk into your property and assign it a new value, correct? I am curious why you didn't calculate the refinance charge in your original post somewhere, seeing that that is a pretty big fee.

thank you for the thread and fielding the questions.

Updated 8 months ago

well done, beast mode!

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