Our personal residence is Zoned R2 but is currently taxed as a single family residence. This said, we have a separate living headquarters on the East side of our house where Grandma lives...So actually our home is a duplex just not on paper. The total house square footage is 1760 (Grandma's 700sqft, our half is 1060). Grandma pays $1000 / month Rent (all utilities included). We owe $87,000 and the home could sell for $209,000. The home has been updated as we have lived here over the last 2 years.
After studying BRRR, I'm not sure where to go with this. I would like to go to a lender and Refinance / pull money out and apply it to purchasing a 2nd home and start the BRRR all over. Part of me is uncertain of the steps to take to get into Home #2. You see, we could still live in this home and be rehabbing another because we have this home rented and rents coming in $1000/Month.
My goal is to have many rentals someday. I would like the communities advice of steps they would take to make this a reality...
I appreciate all of your expert advice on my behalf.
So if you refinance at 75% LTV you are looking at $209,000*0.75 or $156,750-$87000 (The bank will want this loan paid off so they are not in second position if they have to foreclose the house) for a total of $69,750 (minus closing costs). If you are going to BRRRR, are you going to be able to purchase and rehab a house in your area for $69,750? And you need to consider the seasoning period of the lender (let's say 12 months). Are you able to carry the costs of a rehab for 3-6 months while the work is performed and before you have it rented? If the houses in your area are going for $200k + you are going to need to make sure that all of your numbers work before you decide to jump into this, or you will need a partner or some other form of creative financing to make it work.