Looking to Buy 1st 4plex/ Quadplex or BRRRR property

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Hey guys i am about to put my 1st flip on the market for sale. After it has sold i am hoping to purchase my 1st 4plex/quadplex, or BRRRR a single family home. Any advice or tips would be greatly appreciated. looking to connect with investors, flippers, wholesalers or anyone that can help guide me in the right direction.! I am located 20 Mins from Portland Oregon so if you are local hit me up! if not i would still appreciate any tips or advice!

Hi @Jason S Martinez Congratulations on your first flip! Hope it goes great. If you havent already done so, I would recommend attending the local REIA meetings. A lot of the times investors will present their off market deals.

I'd love to connect with you & see if we can one day work together! 

Hi @Jason S Martinez , I BRRR 4-plexes as well, would love to connect with you sometime. My biggest criteria on finding a property is being able to pull my downpayment out after 3 years. Properties with lower cap rates make this easier but it is harder to find them with lower rents. What part of town are you looking at?

Some of the tools needed to play in the fix n flip or BRRRR arena's is the initial pot of cash needed for down payments and closing costs. HELOCS can be used as part of this strategy. I instruct my buyers to always ask the seller to pay their closing costs if they are not in a competitive situation, such as a off market deal. This will lessen the cash out of pocket. However if they are in a competitive situation (in most cases, they are) I tell them to present as clean an offer as possible, meaning don't ask for seller concessions and a fast closing.

Also, the time frame to close on a transaction will help them gain a competitive advantage. Meaning, if they can close in 3-7 days, and the other offers are coming in at a 30-45 day close, they gain an advantage at that point. To do that, you will typically use Hard Money. 

You make your money when you buy right. You should always calculate that a refinance at 75% of the ARV will still get your down payment and closing costs back out of the deal. If you can buy at a deep enough discount to do that on every deal, you will then, always get the cash you put in, back out within 6 months of being on title. There are portfolio loans that will also go up to 85%, so you should be able to get you cash back out of it, some of these loans only require 3 months on title.

The portfolio loans are higher interest rates than a Fannie / Freddie loan, but you can buy the rate down, and so long as you are still cash flowing an acceptable amount, you can choose to go that route.

I have BRRRR clients that do this all the time. Flipper's pay way to much in taxes, you can avoid this by using the BRRRR method, and build your monthly cash flow wealth.

I hope this helps?

I just lend on the properties for all my flippers. They do use wholesalers, but to be honest, most wholesalers don't have good deals, but a person that is dedicated to that pathway, will tend to have decent deals. They will use a buyers agent to help track down deals that are on market as well as deals that have fallen off market. A home that was on the market for a long period of time is ripe for a wholesale offer. So look at time on market and use that as a strategy to make offers.

I hope this helps?

@Jason S Martinez it depends on what you want to do with the deal. I assume you're looking to force appreciation and then refinance out. If so, some of the best advice I received was to buy on the actual numbers (current rents and your expenses), do a solid due diligence and be sure to get a copy of the signed leases. You're bound to the current lease. So, for example, if you want to raise rents but all your tenants are on leases for the next 8-10 months that is going to be near impossible. If the lease states that the landlord pays all heat and utilities, then you're bound to that and must incur the expense until the end of the lease. If the seller tells you the rent is $850 per month but the lease states $700...it's $700 until the lease term is up. If everyone is on a month-to-month you obviously have a the freedom to begin repositioning the property much sooner! If you make sure to keep those 3 items in mind and the numbers work for you then all you have to do is manage the property. Best of luck! -MB

@Kevin Romines this was great advice. I’m looking to acquire a fourplex soon and I believe I need to look into portfolio loans. I want to continue my acquisition of properties without waiting 6 months to recoup all my down payment funds.