Starting to BRRRR - how does this process look?

Question

Hey BP!

I have some money saved up and am ready to start my REI journey. When I sat down a while ago to figure out exactly how I want to go about this, I decided on the following:

1) Save up money enough to finance a BRRRR deal myself (duplex preferably) out of state

2) I am quiet handy, so when the deal closes, I would spend some time working on it + hiring out contractors for some of the rehab

3) I want to document the complete process (how I analyzed the deal; came up with numbers for rents & costs; closing the deal; rehab costs & times with before & after pics; the PM process until being rented out) and set it up in a neatly looking binder/PDF so its very presentable.

4) Present the deal to potential investors I have already lined up and go from there

Does that sound like a good way to get started? I know that a lot of deals are made starting off with other people's money, but I personally feel that if I ask you for money, I want to show you what the process looks like, that I've been down that path and how it all looks.

I appreciate any feedback & suggestions to try and see if I am missing a bigger picture!!

Seth S. · Answer

@Ryan Rominger

Hey Ryan; thanks for the intro. Indy is definitely one of the markets I am looking at and keeping a close eye on.

PM coming your way!

Kenneth Hynes · Answer

@Sev Stan  looks like you got a pretty good hold on it .  Look forward to seeing your progress

Ryan Rominger · Answer

Hi @Sev Stan!

I operate a property management company in Indianapolis called Intrigue Indy. I am also a licensed real estate broker with Nottingham Realty Group and I have had a lot of success helping investors (both local and out-of-state) buy investment properties, repair them, and either lease them to quality tenants (BRRRR) or sell them as a flip (BRSR). Let me know how I can help! I’d love to connect for coffee if you’re ever in town!

Seth S. · Answer

@Kenneth Hynes

Yes, I live in CA but am looking for deals in the mid-west. The nice thing about my job is that I have the ability to do some work remotely. That, combined with a lot of vacation time saved up should give me enough time off to handle the logistics.

Following the guide of doing what you are good at and outsourcing the rest, I will do only work  that I know I can achieve good & fast (80/20 principle).  Then the rest of the work, I will hire out to a contractor.

Having done some remote rehabbing before, I feel like there is different ways it can work. With contractors, the way I found best is to be there in the beginning, middle and at the 90% mark.  Of course, that is with the utopian idea that contractors will not pull a fast one on me, but I think that with reputable references, it can be done.

Kenneth Hynes · Answer

@Sev Stan

Looking forward to seeing you document your success.  Your outline looks good, plus there are a bunch of investor deal diaries here on BP outlining sillier projects

One question -  can you clarify , you are in CA looking for an out of state deal, but looking to do the work yourself ?  How are you going to handle the logistics of that ?

Ken

Seth S. · Answer

Thanks @Andrew Syrios

In your article, can you clarify what you mean by this:

The upfront financing is outside the scope of this article, but what’s important to note here is that different upfront financing options will result in different acquisition and holding costs, and you need to account for those [...]

I think that is one of the items that I have not accounted for in my calculations.

Andrew Syrios · Answer

I think that sounds like a great way to get started, although projects can take a while and so you'll need to be comfortable spending a lot of time outside of San Jose.

If you're interested in more on the BRRRR method, you might like an article I wrote a while back: https://www.biggerpockets.com/renewsblog/brrrr-buyrehabrentrefinancerepeatprimer/