New York City Newbies Looking to BRRRR Into a Home For Ourselves
Hello everyone,
My wife and I would like to start building a rental portfolio through Brandon's BRRRR strategy. We also desperately need to move out of our tiny NYC apartment before we go insane. What we want to do to start seems to be a modified version of the BRRRR strategy, but we're not sure if it's a good idea.
We want to use a hard money lender to purchase a distressed property on Long Island (we haven't been able to compete with all-cash buyers going the traditional renovation mortgage route), fix it up using a combination of contractors and doing some of the work ourselves, rent part of it out (basement apartment) and we'll move into the main living space, then refinance into a conventional mortgage, hopefully with a lot of equity at the end with the ability to pull cash out. It would essentially be a BRRRR strategy, but we would end up living in the home in a house-hack fashion, for the foreseeable future.
At first glance, this sounds even better than a typical BRRRR because I would assume the refinance would be easy as we're both W-2 with good salaries and are already approved for a high mortgage through a few banks. I'm also assuming that hard money lenders would like the idea more than a typical flip because we already have the buyers lined up: us. The obvious issue of finding the property aside, are we missing anything here? Should we just stick with a traditional home-buying approach for our first home, and save the BRRRR stuff for investment properties? I should mention that we also have a solid amount of savings to bring to the table for the initial deal, if needed.
Are my numerous assumptions above on the right track? Would we be messing up any first time home buyer benefits with this strategy? Is there something big that we’re missing?
Thanks for any advice or comments! Love this community!
-Leon