BRRR Strategy Questions

[Kristen Chapin]

I am looking at the BRRR Strategy. When analyzing properties, is there a certain percentage of ARV that you can determine if its a good deal without doing the calculator on every property EX: ARV 300K (must get house for 225,000 without repairs)- 75 percent- Is this right? When you refinance, you get all your money out?

Me and my husband have excellent credit ratings. He makes goods money and so do I but I am a broker and work contract roles so my stability is lacking right now. What are the best routes for us to finance a BRRR? Hard money is alot of money to factor in especially if we cant refinance for some reason. Would we put it under our LLC or ourselves? We have nothing in the LLC at all since I just opened it. Other avenues of finances we have is: a 401k that needs to be transferred since I no longer work with the company anymore, IRA's, 529 plans. Do you always have to have a 20 percent down payment because here near Seattle (ish) thats an easy $50K not including closing.

Sorry in advance for the million questions. I am looking to a very quick calculation on every property in my budget and then if i need to look deeper, go with the calculator. 

Thanks in advance for your replies!

[Jaysen Medhurst]

@Kristen Chapin, 70-75% of ARV (minus repairs) is the right "shorthand," but you have to run the numbers on every deal to really know if it's worth doing. This is especially important on a BRRRR, because you need to know that the property will still be a good investment once it's rented out. In an expensive market like Seattle it's definitely possible to BRRRR a deal, get your 25% equity out, and the property lose money every month. HCOL areas don't often work for 1-4 unit rental properties since their value is driven by the residential market, not the income they produce.

Have you considered doing a BRRRR in a more advantageous market?