Newbie Investor (BRRRR)

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Newbie Investor (BRRRR)

Jordan Gitch
New to Real Estate · Fort Myers FL · Member since 2021 · 9 posts · 4 votes

Hello everyone! New investor over here! I've read a few of the Bigger Pocket books and so excited to get started on my first investment! I have been researching on trying to find the best way to finance (I'm located in SW FL) for the BRRRR strategy, but not having the best of luck, so thought I would ask you! Interested in the Fort Myers Area, Cape Coral, Port Charlotte. I personally use Guild for my own home, really like them. But more Pricey I think, (Could be wrong)

Thank you!

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Stetson MillerBusiness Member
Real Estate Broker · Fort Myers, FL · Member since 2019 · 576 posts · 423 votes
5y

Hi @Jordan Gitch,

Definitely a hard market to be starting out in right now! BRRRR properties are going to be very difficult to find, as I've had a handful of investors looking for months now to find something that would work. Solid rental property purchases, however, are definitely in decent supply. House hacking is a great way to get started with one of these, and definitely much easier to do sooner than a BRRRR.

Let me know if I can help in any way!

[email protected]850-259-2910
Stetson Miller Realtor545 Reviews
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  • Chris Tarpey
    Investor · Jacksonville, NC · Member since 2018 · 193 posts · 107 votes
    5y

    Welcome aboard!

    For the BRRRR strategy, you have a variety of options. I like the idea of using OPM (other peoples money) so I use private money and hard money to buy and renovate houses. This allows me to keep my funding in reserves, which these lenders usually require, and also gives me the flexibility to jump on houses quick, as most hHML/PML can wire cash to escrow.

    These lenders DO like to see experience, so it may be tough to find a lender that will work with you or give you the terms you want, however it is worth it to reach out and get a term sheet once you find the deal you want.

    Another great option to get your foot in the door is partnering with another investor. Find what you can bring to the table and get a few deals done together. This allows you to get the experience that lenders look for, but also the network to grow your own portfolio.

    Best of Luck!

    0Reply
  • Dmitriy Fomichenko
    Solo 401k Expert · Anaheim Hills, CA · Member since 2012 · 18k+ posts · 6k+ votes
    5y
    Originally posted by @Jordan Gitch:

    Hello everyone! New investor over here! I've read a few of the Bigger Pocket books and so excited to get started on my first investment! I have been researching on trying to find the best way to finance (I'm located in SW FL) for the BRRRR strategy, but not having the best of luck, so thought I would ask you! Interested in the Fort Myers Area, Cape Coral, Port Charlotte. I personally use Guild for my own home, really like them. But more Pricey I think, (Could be wrong)

    Thank you!

    You are in a good company Jordan!

      0Reply
    • Michael Kinsella
      Lender · Member since 2018 · 617 posts · 275 votes
      5y

      Hi @Jordan Gitch,

      Starting out, it's probably best to speak with a variety of potential capital sources to get a good idea of what options are available to you.

      You can speak with local banks and see what options they have.

      You can speak with hard money lenders (you can find a list of reputable ones using the BiggerPockets 'Network' tab).

      You can also speak with local reputable private lenders, and see what they have to offer.

      Best of luck,

      Michael

      1Reply
    • Patrick Prunty
      Lender · Newport Beach, CA · Member since 2019 · 99 posts · 64 votes
      5y

      Hello!

      @Jordan Gitch

      There are plenty of private lenders our there who offer unique and create financing options which would work for your BRRRR strategy.

      I personally have been looking into the Fort Myers, Cape Coral, Port Charlotte areas as well.  I don't own a rental there yet but hope to soon find the right opportunity.  Recently, after talking with a few small builders, have considered a build to rent...it seems like a good amount of work but with inventory so low and multiple offers on everything insight, it might be a good option.


      0Reply
    • Jordan Gitch
      OP
      New to Real Estate · Fort Myers FL · Member since 2021 · 9 posts · 4 votes
      5y

      Thank you everyone! I'm also looking into just rental investments instead of BRRRR right away..not quite sure yet! So much to think about. I know traditionally you need to put 20% down..but Maybe with FHA I could get away with 3.5%ish then refinance conventional..repeat?

      0Reply
    • Andrew SyriosPro Member
      Moderator
      Residential Real Estate Investor · Kansas City, MO · Member since 2014 · 10k+ posts · 5k+ votes
      5y

      Welcome to BiggerPockets and good luck investing Jordan!

      Podcast Guest on Show #121
      0Reply
    • Stetson MillerBusiness Member
      Real Estate Broker · Fort Myers, FL · Member since 2019 · 576 posts · 423 votes
      5y

      Hi @Jordan Gitch,

      Definitely a hard market to be starting out in right now! BRRRR properties are going to be very difficult to find, as I've had a handful of investors looking for months now to find something that would work. Solid rental property purchases, however, are definitely in decent supply. House hacking is a great way to get started with one of these, and definitely much easier to do sooner than a BRRRR.

      Let me know if I can help in any way!

      [email protected]850-259-2910
      Stetson Miller Realtor545 Reviews
      View Page
      2Reply
    • John Thedford
      Real Estate Broker · Naples, FL · Member since 2013 · 9k+ posts · 6k+ votes
      5y

      Hello. I am an investor and broker in the area. I would be happy to discuss options. 

      0Reply
    • Salvatore Lentini
      Rental Property Investor · Doylestown, PA · Member since 2008 · 1k+ posts · 1k+ votes
      5y

      @Jordan Gitch - Not sure what your question is.  Depends on what you need.  Need down money?  How's you credit score?  Do you have W2 income?  Your personal and financial situation will affect the way you need to go about financing.  I work with a variety of investor friendly lenders but they all have different requirements.

      0Reply
    • Julio GonzalezPro Member
      Specialist · West Palm Beach, FL · Member since 2008 · 4k+ posts · 1k+ votes
      5y

      Hi Jordan, welcome to the community! Best of luck investing!

      561-253-6640
      0Reply
    • Jordan Gitch
      OP
      New to Real Estate · Fort Myers FL · Member since 2021 · 9 posts · 4 votes
      5y

      Thank you @Stetson Miller 

      0Reply
    • Jordan Gitch
      OP
      New to Real Estate · Fort Myers FL · Member since 2021 · 9 posts · 4 votes
      5y

      @Salvatore Lentini - I don't necessarily need help with the money down, was seeing if instead of the traditional 20% down if there's a way I can do 3%ish on investment loan. Credit score is great! and I'm 1099. Just looking for insight on different things! 

      0Reply
    • Carl Hebert
      Rental Property Investor · Auburn, ME · Member since 2015 · 236 posts · 140 votes
      5y

      @Jordan Gitch I am pretty sure you can only qualify for a FHA 3.5% if it is your primary residence. I bought my first 3 unit that way, but I lived in one of the apartments.

      I would try what @Michael Kinsella mentioned in his post above, check with local banks. They are usually a bit easier to deal with than the larger national banks. 

      0Reply
    • Jordan Gitch
      OP
      New to Real Estate · Fort Myers FL · Member since 2021 · 9 posts · 4 votes
      5y

      @Carl Hebert I’ll check on that! Thanks Carl

      0Reply
    • Milica Krstc
      Lender · Member since 2018 · 668 posts · 34 votes
      5y

      @Jordan Gitch Can you please tell me what is BRRRR strategy? To my knowledge, FHA ( Federal Housing Authority) only does owner-occupied property, not rental/investment property and you need a 650 score and 2 years tax return ( we call it tax return instead of tax record over here)

      0Reply
    • Tracy DayPro Member
      CA · Member since 2020 · 15 posts · 5 votes
      5y

      Hello Jordan,

      Welcome. Do you live in southwest Florida? I'm researching this area also and would like to buy some rentals there. Would love to connect to talk about those markets. What are your overall impressions of these areas as pertaining to rental properties? Is this area known for hurricanes? Anyway, Good luck and reach out if you'd like. 

      2Reply
    • Jordan Gitch
      OP
      New to Real Estate · Fort Myers FL · Member since 2021 · 9 posts · 4 votes
      5y

      @Milica Krstic Hello! It’s Buy Rehab Rent Refinance Repeat.

      0Reply
    • Jordan Gitch
      OP
      New to Real Estate · Fort Myers FL · Member since 2021 · 9 posts · 4 votes
      5y

      @Milica Krstic refinance part being cash out

      0Reply
    • Milica Krstc
      Lender · Member since 2018 · 668 posts · 34 votes
      5y

      @Jordan Gitch Thanks for your prompt reply. FHA will not do any rental property. Since you don't have any prior experiences, you will need 20% down

      0Reply
    • Wesley Davis
      Developer · Tampa, FL · Member since 2020 · 84 posts · 59 votes
      5y

      I agree with @Stetson Miller. The Charlotte - Sarasota market it is exactly the same. I have a line of investors looking for the perfect BRRRR and when one comes on the market it is gone within hours at or above listing price. Sellers will not entertain a lowball offer. Leading many investors to the world of build-to-rent. But even that can be complicated due to the backlog most builders have. You are looking at 8-18 months before construction even starts depending on the builder.

      Just some stats as of today (5/13) in Charlotte County,

      547 - Active listings (SFR)

      1,316 - Pending (SFR)

      844 - Closed in the last 30 days (SFR)

      While the top may seem very doom and gloom let me provide some light. Do your research and find an area you would like to invest in. Know your HOA fees, taxes, insurance, rental rates, all the goods. So when a potential property hits the market you are able to say yes and put an offer in right away.

      Hope this helps,

      Wes

      2Reply
    • Wesley Davis
      Developer · Tampa, FL · Member since 2020 · 84 posts · 59 votes
      5y
      Originally posted by @Tracy Day:

      Hello Jordan,

      Welcome. Do you live in southwest Florida? I'm researching this area also and would like to buy some rentals there. Would love to connect to talk about those markets. What are your overall impressions of these areas as pertaining to rental properties? Is this area known for hurricanes? Anyway, Good luck and reach out if you'd like. 

      Tracy,

      All of Southwest Florida is booming! As for hurricanes, yes very much so. Born and raised in Charlotte County, I have been through several hurricanes and that is why we have insurance and building codes. Google Hurricane Charley 2004. 

      Let me know how I can help,

      Wes

      0Reply
    • Tracy DayPro Member
      CA · Member since 2020 · 15 posts · 5 votes
      5y

      Thank you,Wes!

      0Reply
    • Peter Davis
      Real Estate Broker · Cape Coral, FL · Member since 2014 · 382 posts · 300 votes
      5y

      I wanted to comment on this thread regarding the competitiveness of offers right now and a couple strategies. 

      I had a buyer of an Estero townhome waive the appraisal contingency in their offer to make it more appealing to the seller. The seller accepted their offer but the appraiser used comps that were six months old which in a normal market is reasonable but not now when values have surged just in the last three months. As a result, the appraisal was lower than the contract price. The seller reduced their price some but not all the way to the appraised value so my buyer came up with more cash to fill the gap. 

      For cash buyers, if you have a general contractor or home inspector tour the home with you during your showing to evaluate the home's condition, you might waive the inspection period in your offer. This can be risky but if it's a newer home or one that's obviously been well maintained and you've checked the permits to determine the age of the larger components (roof, plumbing, etc.) it might be worth the risk to get in the game. 

      0Reply
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