1yr BRRRR/Value Add = $1,440,600 in portfolio equity but no money in the bank, HELP

[Tony Pellettieri]

It's been a long 9 months but the time seems right to climb out from the trenches and return to the BP community.

During my first few months as a Real Estate Investor, I was on the forums almost daily. Getting advice on BP helped me overcome many of the hurdles as a new investor while I started BRRRing. I was closing as many deals as I could figure out how to get financed. I also managed to creatively acquire two apartment buildings with $0 down about 4 months ago, one of which currently has a water main Leak under the slab and two of the residents have been without water for over a week, but that's another story for another time... 

In December 2023 I started with...

$25,000 in the Bank
823 credit score
3-5% revolving utilization
very little debt
ZERO experience in anything real estate or construction related
Knowledge acquired from listening to 123 audible books over the previous years

14 months later...

$847 in the bank
699 Credit Score
133% revolving utilization/over the limit maxed out personal credit cards
Quite a bit of other high interest debt/loans borrowed during the first year in business
$3,580,000 Appraised Portfolio Valuation
$2,139,400 DSCR Mortgage Debt in my LLCs
$1,440,600 Equity (Appraised Value-Mortgage debt)
8 Remodeled SFRs
1 Converted Remodeled Duplex
2 SFR Remodels currently in process
2 Apartment Buildings - 13/14 units occupied
A little more experience to say the least
234 Audible books in my library

As I'm sure any experienced investor can gather, having the sizable amount of personal debt as I do, supplier house account payments due, PMLs that need to be paid, etc, not having liquidity/any money in the bank is an ISSUE. I currently have 2 vacant houses I purchased just over a year ago listed for sale on the MLS but no bites as of yet. Not the best time of year and we're in an emerging market area about an hour outside of Charlotte, NC.

30Y DSCR c/o Refi's have already been done on every eligible property after rehab / 3 months seasoning.

As more of our properties come up on 1+ yr of ownership, despite losing likely future appreciation of 25-30%+ annually and paying a 5% PPP, I are open to selling some houses off to start paying off much of the high interest debt accumulated outside of mortgages. 

Are there any asset backed loan products that lend in second position or any other forms of financing able to be collateralized by equity you can think of?

[Jay Hinrichs]

Quote from @Shiloh Lundahl:

@Tony Pellettieri Interested deferred second position notes at 15% leveraging the properties at no more than 70% of the current value for 24 -36 months on properties you plan to sell during that time. Use the money only to stabilize assets and yourself. Don't buy any more assets until your reserves are filled again. It is possible to go broke by buying good deals. Don't let that happen to you. 

those would be tough to land shiloh  maybe friends or family.

my advice FWIW is total liquidation IE sell it all.. get out of debt and start over . 1.4 mil in equity probably will realistically boil down to less than half of that in cash.. But even if one ended up with 500k in cash .. thats a nice nest egg to start over with and realize that there is a ton more to RE investing than collecting doors and debt.