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?
@John Morgan did you have to do any big repairs on these properties
I didn't spend any $ on my first. It just jumped in value over the last couple years. but spent 26k on my first BRRRR. And I'll probably spend 20k on my next one. So my 130k I spent on my first SFR turned into 140k cash I got on a cash out refi. I took that $ and bought another rental and the tenant paid for my loan. So I basically got a home for free. And now I'm in the process of pulling 140k out of the last BRRR (which I spent 26k on). And this will lead to me acquiring another SFR for free
Rental Property Investor 路 Carthage, NY 路 Member since 2019 路 72 posts 路 47 votes
6y
I saved up $10K for my 1st single family home deal in Akron, Ohio when I was age 18. That was 25% down on $40K back when conventional lenders would loan on as low as $40K homes. I used $6K on credit cards to rehab the property. It rented for $700, about 50% of that free cash flow, and appraised ARV of $91K a few months later. Now a days, I think its much easier. Homes in relatively depressed areas of Akron or Lima can easily now sell for $10K cash. These are blue collar areas, not slums. I say this because I've dealt with some of the very worst areas in NY. We purchased one over here for $5K cash. After 3 years of not even touching it, the value as it sits is around $100K, ARV with $35K put in is $275K. Three points: 1) $20K is plenty to get started in BURRR. Even $10K if one can determine an area likely to appreciate dramatically in 1-3 years. 2) I just sort of smh and chuckle when investors are often so afraid of class C properties. I would seriously look to determine which parts of Detroit or Toledo will do that, if I were in the NW Ohio area. 3) For any newbies having trouble with initial startup capital, Ohio is a place where one can start with $3K for a mobile home,to flip and get their 1st 20K. If thats still too much, go to the Akron auto auction and flip a few cars first. I realize I stand alone on many of just my opinions. Making a 1st $1M off $20K in 4 years is easy. Best of luck.
Rental Property Investor 路 Cambridge, MA 路 Member since 2016 路 634 posts 路 415 votes
6y
There are some great BRRRR deals in this thread. Congrats to the posters that were able to pull off successful BRRRR deals. My first major rehab deal was a bit different than a straight BRRRR, and might still be worth sharing. I bought a duplex with commercial financing with 25% down (about $50k out of pocket). After closing on the property, I was able to negotiate with the bank to fund 50% of the original rehab costs (about $18k). I put in about $43k into the rehab about two years ago, paid off the $18k from the bank and put a second mortgage on it for $65k. Total numbers, about $80k invested, $65k just pulled out, about $15k into a property that's worth around $270k.