Please anyone help with feedback on my SFR strategy.

2 Replies

Basically I have an idea to jumpstart my real estate journey. The idea I believe is genius and works very well because of the relationship with my dad and Texas laws. But I wanted professional feedback on where I can go wrong or if I’m way over my head on this and/or what I can expect.

I’m going to get a very low interest rate loan with this method.

I learned in Texas if you purchase a home from immediate family the lenders are allowed to give you a “gift of equity”. So I’m going to buy my dads house. (I live with my dad) and still going to stay with him after.

The math is like this based on my hw

My dad owes 92k on the house and the house is appraised at 260k

Since I’m purchasing my dad’s home (Texas law) I can use a gift of equity as a down payment. Which will be anywhere from 55k-60k

The beauty of this is I don’t come anything out of pocket versus traditionally I would have to make a 55k DP in order to purchase the home.

All said in done my dad will walk away with about $115k cash and I will now take over the home mortgage which is estimated around 1400-1600 a month.

I'll take the 115k loan from my dad and strategically invest in BRRRR properties. The goal is now to offset and exceed my mortgage payment.

I have done the math on it and will have a local company in Houston help me find properties with my criteria to purchase. Goal is to get SFR's yielding ATLEAST $400 cashflow a month.

The goal is to invest all the 115k slowly within maybe a year or so. The goal is to get 10 SFR. Cash out of pocket no more than 10k per house.

With my plan all should yield about 4k/month in cashflow. Subtract my 1600 mortgage payment and now I am netting 2,400/month in cash flow.  4000 - 1600 = 2400/month

My now 10 properties will be gaining equity so now I can really aggressively pull out equity loans and multiply my portfolio. My mortgage is being paid on its own now also. 

I feel like there are a million ways I can wrong with this and would LOVE some expert feedback please. Am I way over my head or is this genius?

Thank you so much

Additional Info

I have a pretty good job I am blessed with I make around 5-7k a month and after all expenses paid I save about half of the income which could be 2.5-3.5k+ a month

This should all supplement my journey if something goes wrong. Atleast I hope so. 

@Anthony Dooley Hey Anthony I'm kinda new to posting on bigger pockets. I wasn't sure which forum criteria my question fit in so I just thought I would post it in the ones that most closely matched my question. Sorry about blowing up the forums with the same question.