To much, to soon and too fast?

1 Reply

Hey BP,

So here it goes ...

I have been getting really interested in RE the last few months, and decided enough is enough for just looking and analyzing deal after deal without taking actions, so I applied for a conventional investment property loan on a multifamily, which was approved with 25% down ... great! So I've been looking at properties (duplexes, triplexes), and finally found a duplex and made an offer (waiting to hear back). If the offer is accepted, I have to come with 36K cash to the table, which is fine. That duplex would cash flow 200$/mo - 100$/door.

Just browsing, I found a what seems to be a pretty good deal on a duplex foreclosure in another state going for about 30K. It would probably need about 35K in rehab to make it rent ready and ARV about 140k, and could cash out refi for 100k. I would want to keep this property and not resell it. Now mind you, the only deal I have to date is my personal residence. My wife says its spreading pretty thin, and that i need to slow down and crawl before I run and not go balls to the wall so fast from zero deals to a deal, and a BRRRR project at once. I am the main W2 provider of the house, and after 100k being tied up in these deals, we would be tapping in to our 6/mo emergency fund to start paying bills, until we can build our bank roll again from my W2 job.

A) If i did do the BRRRR duplex, should i cash out refi or keep the money in and own it outright with higher COC return if I can afford it? If i don't cash out refi, it would cash flow 275$/door. If I do refi at 100K, more like 20$/mo total. Should I cash out for lower? On a cash out of 80K, cash flow is about 125$/mo total.

B) Am i going to fast? Do I need to slow down and focus just on the current duplex acquisition i have going on?

C) Should I try to borrow money/partner up, or use all my own straight cash?

Please any input. Thank you

-Joey