Professor · Caldwell, NJ · Member since 2015 · 12 posts · 2 votes
Question:
Say, hypothetically, that you were starting from scratch and had $400k or $500k and wanted to start buying single family rental properties. Would you deploy the BRRR strategy? And how/when (if at all) would you finance or refinance? How many do you think you could buy with that amount (and a strategy for moving forward)?
Plymouth, MI · Member since 2013 · 13k+ posts · 19k+ votes
10y
No. I actually have a model I developed based on starting with that exact dollar amount that involves a number of different steps and strategies all put together in a plan. The difference is, my plan is based on a loan of that amount...not cash. I'm presenting it to my REIC this month. Here is the Order of Appearance for the different strategies:
1 - Acquire Original Non-Lienable Debt Loan, and Fund a Cash Reserve to make monthly payments on Original NLD Loan (OL)
2 - Buy Absolute NNN Commercial Property for steady CF that makes OL monthly pmts and deposits for OL Payoff.
3 - Use balance of funds to start flipping SFH
4 - Re-Use original purchase/rehab funds over and over to flip ===> profits
5 - Accumulate profits to expand the # of Flips you can do at a time
6 - Use Accumulated Profits to buy either SFH Rentals, or additional NNN Commercial properties for the Cash Flow
7 - Pay off OL
8 - Collect continuous CF from NNN and/or SFH Rentals
9 - Put on auto-pilot
10- Retire in....(you fill in your chosen destination)
Professor · Caldwell, NJ · Member since 2015 · 12 posts · 2 votes
10y
So, you favor SFH flipping, and you use the NNN to get the cash. And therefore I suppose my hypothetical money would come in at your step 3? Or do you see it differently. Thank, btw.