Using BRRRR to expand my portfolio
Hello All,
I am trying to find ways of building a portfolio of multifamily houses in Western Ma. Running through the numbers, I realized I could use my savings and purchase 4 or 5 properties at 25% down, at which point I would be out of cash. Using BRRRR seems like a way to utilize the same investment dollars over and over, allowing me to expand the business without the financial constraints of plopping down $70-80K at a pop for down payments and closing costs until I run out of cash.
Am I missing something here? Any and all comments/suggestions are welcome.
Thanks,
Chuck
- Lender
- Austin, TX
- 3,204
- Votes |
- 3,220
- Posts
I don't think you are missing anything - thats definitely the main benefit of BRRRR - being able to use that same capital over and over again, the key is being able to manage and successfully execute on the rehab side of the equation, which is obviously more challenging than just purchasing turnkey properties
Quote from @Charles Greene:
Hello All,
I am trying to find ways of building a portfolio of multifamily houses in Western Ma. Running through the numbers, I realized I could use my savings and purchase 4 or 5 properties at 25% down, at which point I would be out of cash. Using BRRRR seems like a way to utilize the same investment dollars over and over, allowing me to expand the business without the financial constraints of plopping down $70-80K at a pop for down payments and closing costs until I run out of cash.
Am I missing something here? Any and all comments/suggestions are welcome.
Thanks,
Chuck
It’s all about forcing appreciation through the rehab process. Whether it be single family or multifamily the concept is the same. The hard part is finding good investments that have the ability to force appreciation and navigating interest rates.
@Charles Greene that strategy has worked for many investors and still can today but with the increase in OOS investors, the limited supply, and the tightening lending market, run your numbers conservatively. Expect to leave cash in the deal, run your cash outs at 70% LTV as most of my clients are not debt covering at 75 LTV on the cash out.
-
Lender CA (#02115256) and NMLS (#1993906)
- Investor Property Loan