How much did you save up for your first BRRRR?

28 Replies

I'm excited to start investing and I am looking to BRRRR my first property in a lower income market of about 40,000-60,000 people. I was wondering how much you saved up for your first BRRRR for a 1-4 unit?

I had right at $50k in my first buy & hold + rehab, all paid in cash I saved. That would be tough to do today in pretty much any market in the US other than "war zones". 

Originally posted by @Garrett Gatton :

@JD Martin what have some of your more recent buy + hold rehabs cost you?

 One I am doing now will be all in at about $130k. So as you can see it's gotten a lot more expensive than some years ago. On the plus side, rents have gone up quite a bit to make up for the added costs. 

Typically in the Kansas City market for a solid BRRR you'd need 75K-100K to be all in. That's usually C-B class areas.

I will be the odd man out. I don't like to have any cash into my rentals. I prefer to buy at around 50% ARV, rehab it, refi it and get all my money back out - then my returns are infinite. But different strokes for different folks. That is what is awesome about REI, no one path is right.

I'm in the middle of my first and when it's all said in done I'll be all in for about $100K (including holding and closing costs for the refi).  Basically, I saved about $80K, and used no interest credit cards for the rehab. I would caution anyone to be sure they know they will be able to pay off the card before going that route.

@Garrett Gatton There are a few ways you can get a multifamily 1-4 unit for low down payment. FHA 3.5% down but you must live in it for at least a year. Conventional with 5% down. On a 100k property you are talking about 3.5k and 5k. Do you think you could save up that much to get something in your area?

I had to hustle to get my first one.  Worked 2 jobs for about 2 years.  That allowed me to improve my credit score, covered my low downpayment and repairs since houses are expensive here.

@Garrett Gatton , I didn’t save up any money for my first Brrrr. I used a business credit card to fund the acquisition and rehab costs. Got it rented, started the refi in the fifth month and closed just after seasoning for 180 days (6 months). Got all money out except $2k.

130k cash for my first one. Did a cash out refi on it last summer and pulled out 140k to snag another house with a low ball cash offer of 135k. Did a BRRRR on it and doing another cash out refi. Bought another SFR for 132k cash with this $. I'll keep pulling $ out of these properties and buying more if it makes sense. Making cash offers can get you some great deals if you keep trying.

I was lucky enough to come at it with financial backing. But if I had to come at on my own, I would recommend you have at least 10% of the anticipated all-in price in the bank if you can fully finance it with a private lender. If you can only finance part of it, then I would say 10% of the anticipated all-in price plus whatever gap there is between your financing and what you budget the cost of the property to be. Then, if you go over budget on the rehab, you have some room to finish it up. 

@Garrett Gatton

You could always find a partner to compensate for areas you lack in (money, credit, possibly even track record, etc.) some profit is always better than no profit. As long as you show people you have the knowledge, grit and honest-to-god confidence, finding a partner is doable.

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