How much did you save up for your first BRRRR?

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How much did you save up for your first BRRRR?

Garrett Gatton
Real Estate Agent 路 Lima, OH 路 Member since 2019 路 34 posts 路 18 votes

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?

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Alexander FelicePro Member
Guy with Great Hair 路 Austin, TX 路 Member since 2013 路 2k+ posts 路 4k+ votes
6y

I had saved up 71K and paid 68K all-in for my first rental.

It appraised at 105K and I refinanced 100% of my funds out, repeated the process ~7 times. 

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  • JD MartinBusiness Member
    Moderator
    Rock Star Extraordinaire 路 Northeast, TN 路 Member since 2015 路 10k+ posts 路 16k+ votes
    6y

    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". 

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  • Garrett Gatton
    OP
    Real Estate Agent 路 Lima, OH 路 Member since 2019 路 34 posts 路 18 votes
    6y

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

    0Reply
  • JD MartinBusiness Member
    Moderator
    Rock Star Extraordinaire 路 Northeast, TN 路 Member since 2015 路 10k+ posts 路 16k+ votes
    6y
    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. 

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  • Caleb Brown
    Real Estate Agent 路 Kansas City 路 Member since 2018 路 4k+ posts 路 3k+ votes
    6y

    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.

    1Reply
  • Garrett Gatton
    OP
    Real Estate Agent 路 Lima, OH 路 Member since 2019 路 34 posts 路 18 votes
    6y

    So starting out how long did it take to save up that amount? Or did get your first few properties with a loan?

    1Reply
  • Marcus Linehan
    Rental Property Investor 路 Member since 2018 路 33 posts 路 20 votes
    6y

    I bought a buy & hold back in June, buy + rehab all in cash deal $71k. Rented for $1,100

    7Reply
  • Dan Krupa
    Real Estate Broker 路 Phoenix, AZ 路 Member since 2013 路 749 posts 路 399 votes
    6y

    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.

    7Reply
  • Danielle Wolter
    Rental Property Investor 路 San Diego, CA 路 Member since 2019 路 290 posts 路 253 votes
    6y
    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.
    3Reply
  • Alexander FelicePro Member
    Guy with Great Hair 路 Austin, TX 路 Member since 2013 路 2k+ posts 路 4k+ votes
    6y

    I had saved up 71K and paid 68K all-in for my first rental.

    It appraised at 105K and I refinanced 100% of my funds out, repeated the process ~7 times. 

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  • Brent Paul
    Rental Property Investor 路 Shakopee, MN 路 Member since 2015 路 985 posts 路 374 votes
    6y

    @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.

    3Reply
  • Garrett Gatton
    OP
    Real Estate Agent 路 Lima, OH 路 Member since 2019 路 34 posts 路 18 votes
    6y

    @Alexander Felice wow!!! That's awesome! Where'd you find your first deal?

    0Reply
  • Alexander FelicePro Member
    Guy with Great Hair 路 Austin, TX 路 Member since 2013 路 2k+ posts 路 4k+ votes
    6y
    Originally posted by @Garrett Gatton:

    @Alexander Felice wow!!! That's awesome! Where'd you find your first deal?

    My first was on the MLS

    It was ~2016 when deals were abundant 

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  • Jason D.
    Rental Property Investor 路 St. Petersburg, FL 路 Member since 2017 路 3k+ posts 路 4k+ votes
    6y

    @Garrett Gatton my first BRRRR cost me about $40k up front. When all said and done, i was all in for $110k and it appraised for $163k so I ended up with nothing into the deal, but needed $40k to get through it

    0Reply
  • Garrett Gatton
    OP
    Real Estate Agent 路 Lima, OH 路 Member since 2019 路 34 posts 路 18 votes
    6y

    @Jason D. What was the other 70k and how did you finance that part?

    0Reply
  • Jason D.
    Rental Property Investor 路 St. Petersburg, FL 路 Member since 2017 路 3k+ posts 路 4k+ votes
    6y

    @Garrett Gatton hard money lender

    0Reply
  • Christopher Toth
    Rental Property Investor 路 Denville, NJ 路 Member since 2017 路 107 posts 路 54 votes
    6y

    @Garrett Gatton, I didn鈥檛 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.

    1Reply
  • Brandon Beatty
    Investor 路 Dallas, TX 路 Member since 2013 路 100 posts 路 31 votes
    6y

    @Garrett Gatton I put 35k down on my first BRRR but house hacked since it was a duplex. I lived in one side and rented the other

    0Reply
  • John MorganPro Member
    Rental Property Investor 路 Grand Prairie, TX 路 Member since 2018 路 2k+ posts 路 2k+ votes
    6y

    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.

    3Reply
  • Andrew SyriosPro Member
    Moderator
    Residential Real Estate Investor 路 Kansas City, MO 路 Member since 2014 路 10k+ posts 路 5k+ votes
    6y

    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. 

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  • Ondrej Brown
    Rental Property Investor 路 Cleveland, OH 路 Member since 2019 路 150 posts 路 47 votes
    6y

    @Brent Paul Now this is the way to go. No offense but I wouldn't want wait that long to save up all that money y'all . Use the FHA loan put a 3.5% down payment on the property and go from there .

    0Reply
  • Account Closed
    Rental Property Investor 路 Canton, OH 路 Member since 2017 路 1k+ posts 路 1k+ votes
    6y

    @Garrett Gatton

    $48,000. Project cost me $55,000...so I had to use a credit card to cover the difference until I closed on the refi. B neighborhood 

    0Reply
  • Omar Diaz
    Fort Polk, LA 路 Member since 2019 路 29 posts 路 14 votes
    6y

    @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.

    0Reply
  • Robert Collins
    Rental Property Investor 路 Greenville County SC / Atlanta, GA 路 Member since 2017 路 403 posts 路 120 votes
    6y

    @Dan Krupa

    I like this route 馃挴. I plan to do it the same . How much per door do you look on cash flow after the brrrrr

    2Reply
  • Robert Collins
    Rental Property Investor 路 Greenville County SC / Atlanta, GA 路 Member since 2017 路 403 posts 路 120 votes
    6y

    @John Morgan did you have to do any big repairs on these properties

    0Reply
  • Garrett Gatton
    OP
    Real Estate Agent 路 Lima, OH 路 Member since 2019 路 34 posts 路 18 votes
    6y

    @Dan krupa what is the reasoning behind buying at 50% ARV?

    0Reply
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