Where to go from here (first 2 or 3 deals)?

Question

Hello, here is my plan and problem:1) Recently closed on a Duplex. w/VA Loan2) In 1 year, plan to buy another w/VA Loan3) Year later, buy another 2-4 unit with FHA Loan.

This is where I get stuck.  Where do I continue from here?  I will not have enough equity or saved cash to upgrade or buy a large multiunit.  Or am I missing something?  What is your strategy for growing and what do you think I could do to grow larger/faster?

Troy Marschall · Answer

Hey @Shane Welch,

My recommendation if you are doing it on your own:

The BRRRR strategy. It stands for Buy, Repair, Rent, Refinance, and Repeat. When used right, the BRRRR method can allow you to buy rentals at a discount because they need work, and refinance most of their money out because they added value through repairs. This method can allow you to raise rents to market value.

- The key is research and knowing the market that you want to invest in. Know the numbers and do not fall in love with a deal if the numbers do not work.

V/R - Troy

Corby Goade · Answer

You can only use FHA if you plan to live in the property- I believe the same is true for VA. The trick is to buy a property that you can force equity in quickly. You leave a trail of cash flowing properties with equity behind you, and as your equity builds, you use it to start acquiring properties with "cash." If you start out with three to five good deals that you've been able to quickly do some value adds, you should be able to start buying with cash, and from there you are only limited by the number of good deals you can find.