Suggestions on how to best utilize out 1031 Exchange funds

[Pat Mulligan]

We have $1.3M we have to spend, roughly $380K of that in a mortgage. We were thinking of BRRR-ing a combo of 3 or 4 SF and duplex properties in 2 different markets. Of course, we would love to be "cash buyers" for a quick close, but obviously, we can't be on all of them.

Can we get decent financing on a conventional loan if the properties do not yet have any rental history?  Also, if we plan to short-term or mid-term some doors, how does that affect financing options? 

If we can't get conventional loans with 30% down payments, we were going to buy 2-3 and refinance them later. I just need to at least get that $380K loan incorporated into the exchange.

BTW-We are experienced long-distance landlords and 10-year Airbnb hosts. Cash flow will not be terrific because of the markets,  but we are willing to buy and hold long-term. We identified these markets for personal reasons.

Thanks in advance for any advice you can give me.

Pat

[Steven Foster Wilson]

Quote from @Pat Mulligan:

We have $1.3M we have to spend, roughly $380K of that in a mortgage. We were thinking of BRRR-ing a combo of 3 or 4 SF and duplex properties in 2 different markets. Of course, we would love to be "cash buyers" for a quick close, but obviously, we can't be on all of them.

Can we get decent financing on a conventional loan if the properties do not yet have any rental history?  Also, if we plan to short-term or mid-term some doors, how does that affect financing options? 

If we can't get conventional loans with 30% down payments, we were going to buy 2-3 and refinance them later. I just need to at least get that $380K loan incorporated into the exchange.

BTW-We are experienced long-distance landlords and 10-year Airbnb hosts. Cash flow will not be terrific because of the markets,  but we are willing to buy and hold long-term. We identified these markets for personal reasons.

Thanks in advance for any advice you can give me.

Pat

 Hi Pat, 

To answer your first question, yes! They will use market rents for the properties. If I were you I would look into the Ohio markets, we are becoming and really already are a huge tech hub. With big businesses being in Columbus such as Intel, Amazon, Chipotle, the Limited, and more. We have seen people flooding here. I think now is a perfect time to invest here and I help multiple clients every week get slam-dunk deals. It was even the 5th hottest housing market in 2022 according to https://learn.roofstock.com/blog/columbus-oh-real-estate-market.

I have also been investing in Cleveland more. There are incredible deals to be had there. Your money will go really far.