My name is Adam Jutte and my business partner and I are new to the Dayton area. We have been planning for sometime how we could get into the real estate business. After evaluating our strengths and weaknesses we are ready to take the leap and start the journey. We are hoping to implement the BRRRR strategy and wanted to know if people have done this successfully in Dayton, OH and if so if they had any advice on areas to look into.
At a very high level:
- We are looking in Dayton, OH
- My business partner owns a professional remodeling company in Dayton, OH
- I work on the numbers and analysis side of it
Thanks in advance for any advice,
Welcome to BP @Adam Jutte ! The BRRRR strategy is a good one, but if I can give you one piece of advice, it would be to make sure that your refinance lender (the last R) is a lock to go. Otherwise you could end up with a property using hard money or having significant holding costs.
Thanks @Dan Barli . Would you recommend talking this strategy with a local bank to make sure they are comfortable refinancing a recently remodeled house. Is there a risk/reason that banks wouldn't refinance?
I think you can be honest with the lender and tell them you are rehabbing the home and then looking to refinance once you have improved its value. You want to emphasize that you are increasing the value of the home so they can have more comfort in performing the refinance for you.
Risk/reasons a bank wouldn't refinance include that they don't trust the rehab that was done. So you want to make sure you have everything documented to prove the work that you did. Or of course if you don't have good personal credentials (credit, income, etc), they would be less likely to give a refi.
Welcome to Bigger Pockets.
Hi @Adam Jutte - welcome to BP and Dayton.
We host a monthly networking meetup in Fairborn. Details are on here under Events, as well as meetup.com. Next one is October 9th. Lots of active investors there, as well as those getting started and everything in between. We also have a very active Facebook group for people to ask questions and post deals in between meetings.
Due to market inventory being in short supply right now, competition for deals is high. Having a partner in the renovation business can help to keep some of your costs down, possibly giving you an edge on the buying side.
Areas to target will largely depend on your income goals, your plans for property management, and your tolerance for drama.
Regarding the refi part of your plans, @Darrin Carey can also offer some input - especially about target values, timelines, and the various pitfalls.
As with most anything else in this business, the strategy is definitely achievable so long as you do your homework beforehand.
@Christina Carey thank you so much for the feedback. I already gave your page a follow on facebook and I will reach out to Darrin. We have a lot of experience in rehabbing and remodeling so that gives me confidence we can be competitive on pricing and still control our costs.
Hi Adam, welcome to the area. I grew up there and am also interested in investing there.