Looking to purchase 10 homes in the next 10 years.

BRRRR - Buy, Rehab, Rent, Refinance, Repeat

Looking to purchase 10 homes in the next 10 years.

Real Estate Agent · Coeur d’ Alene, ID · Member since 2022 · 17 posts · 6 votes

Hi everyone, I'm a current agent and interested in purchasing 10 personal homes over the next 10 years. Every year I plan on renting out my previous home and buying a new primary. I am licensed so my commission will go towards my down payment so I will have very little out of pocket ever year. Is this a good way for me to accumulate properties or is there a better ROI out there? I have about 75k liquid right now and am currently renting. Thoughts?

Thanks in advance.

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Don SpaffordPro Member

Investor · Idaho Falls, ID · Member since 2016 · 912 posts · 629 votes

If you plan to live in each property anyway, then why not househack better? Buy some 4 plexes in the mix, live in a unit for a year, then another, and so on. You can still reserve some of the units for STR if you would like or rent them all as LT. But then you also have the other units covering your mortgage in the meantime so that you can accumulate more cash savings. That's what I would do. Currently though I am more focused on passive income through syndications so I don't have to deal with tenants and problems.

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Chris Davidson
Real Estate Agent · Boise, ID · Member since 2016 · 1k+ posts · 888 votes
4y
@Josh Harper. I would change the plan a little and think about taxes and the exit. If you move your primary every year you avoid short term gains and pay capital gains. However if you hold for 2 years use as a rental for 3 and then sell you can take it tax free up to 250k or 500k if married. Still buy one a year, just maintain your primary for 2 years before moving. When you sell it before your 5 year mark use those funds to accelerate your plan. While getting your second year in the primary you just have to buy as an investment property but the additional cost is well worth the tax savings. Next thing you know you will have 10 houses in 7 years. I think this is the best ROI and given you are an agent you wont have as large of transaction cost so moving in and out of properties won't cut into your profits as much.
Get after it!
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Josh Harper
OP
Real Estate Agent · Coeur d’ Alene, ID · Member since 2022 · 17 posts · 6 votes
4y
What if I plan on never selling these? Does that affect the taxes?
0 Reply
Josh Harper
OP
Real Estate Agent · Coeur d’ Alene, ID · Member since 2022 · 17 posts · 6 votes
4y
Do you think this is a solid plan or would I be better off buying 2-3 strs annually in lower price point areas. Im sure. you are familiar with our prices up here being from Boise.
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David M.
Morris County, NJ · Member since 2020 · 5k+ posts · 2k+ votes
4y
@Josh Harper
It really all depends on your investing goals. Then, your available resourcing. For example, after purchasing the first property, how will you afford the second? WIll you be able to build up the capital for it? Or, do you qualify for 0% down loan? Even FHA 3.5% or 5% conventional will add up. Plus, the costs of moving and closing costs, of course.
Not sure what your plan is for financing, but that is one of the aspects that is overlooked. Certainly, there can be many ways to handle it, but many investors don't look at it closely enough or just figure "where there is a will there is a way." This is probably why there are so many threads with people asking for last minute help on financing issues because they didn't look ahead well enough.
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Josh Harper
OP
Real Estate Agent · Coeur d’ Alene, ID · Member since 2022 · 17 posts · 6 votes
4y
Quote from @David M.:

@Josh Harper
It really all depends on your investing goals. Then, your available resourcing. For example, after purchasing the first property, how will you afford the second? WIll you be able to build up the capital for it? Or, do you qualify for 0% down loan? Even FHA 3.5% or 5% conventional will add up. Plus, the costs of moving and closing costs, of course.
Not sure what your plan is for financing, but that is one of the aspects that is overlooked. Certainly, there can be many ways to handle it, but many investors don't look at it closely enough or just figure "where there is a will there is a way." This is probably why there are so many threads with people asking for last minute help on financing issues because they didn't look ahead well enough.

I make great money so the down payment won't be an issue, Also if I stay in Idaho then I make 3% commission when I buy something so that usually covers most the down payment if not all of it.
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David M.
Morris County, NJ · Member since 2020 · 5k+ posts · 2k+ votes
4y
@Josh Harper oh that's nice. You can get consistent financing at less than 3% down (I assume you have some split with your broker). What about closing costs (not just prepaids/escrows)?
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Josh Harper
OP
Real Estate Agent · Coeur d’ Alene, ID · Member since 2022 · 17 posts · 6 votes
4y
I have the funds for closings costs, no splits on personal deals so that works out well.
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Ray Johnson
Irvine, CA · Member since 2016 · 545 posts · 614 votes
4y
@Josh Harper when I first started out, I had a similar plan. I would live in the homes 12-18 months then rent it out as I moved into the next property.
The problem I ran into was being able to find a good investment property that met the price, location, and property class in that same 12 -18 month time frame.
Sometimes I would hit the mark and have a new property within the 12-18 month window, other times I would find the right property between 24 - 36 months due to my high standards for what I want in my portfolio.
You may want to adjust your number to 10 properties in 11 years (+plus) as your best case scenario if you plan on buying with Owner Occupant (OO) financing to obtain the lower rate, you will find yourself going past the required 12 month OO window so 10 properties in 10 years isn't possible.
I think if you blend your strategy with non Owner Occupant properties, you can hit your target of 10 properties in 10 years.
The strategy works.
1 Reply
Aj Parikh
Rental Property Investor · Centreville, VA · Member since 2019 · 1k+ posts · 799 votes
4y
Hi Josh, I would suggest looking out of state to invest in cash flowing properties. I am an out of state investor based in Northern Virginia and primarily invest in Cleveland in SFH and small multi family units. 75k downpayment can get you a small apartment building. Let me know if you want to connect
1 Reply
Don SpaffordPro Member
Investor · Idaho Falls, ID · Member since 2016 · 912 posts · 629 votes
4y
If you plan to live in each property anyway, then why not househack better? Buy some 4 plexes in the mix, live in a unit for a year, then another, and so on. You can still reserve some of the units for STR if you would like or rent them all as LT. But then you also have the other units covering your mortgage in the meantime so that you can accumulate more cash savings. That's what I would do. Currently though I am more focused on passive income through syndications so I don't have to deal with tenants and problems.
4 Reply
Josh Harper
OP
Real Estate Agent · Coeur d’ Alene, ID · Member since 2022 · 17 posts · 6 votes
4y
Quote from @Don Spafford:

If you plan to live in each property anyway, then why not househack better? Buy some 4 plexes in the mix, live in a unit for a year, then another, and so on. You can still reserve some of the units for STR if you would like or rent them all as LT. But then you also have the other units covering your mortgage in the meantime so that you can accumulate more cash savings. That's what I would do. Currently though I am more focused on passive income through syndications so I don't have to deal with tenants and problems.
I have heard a few times now about syndications. Can you tell me more?
0 Reply
Josh Harper
OP
Real Estate Agent · Coeur d’ Alene, ID · Member since 2022 · 17 posts · 6 votes
4y
Quote from @Aj Parikh:

Hi Josh, I would suggest looking out of state to invest in cash flowing properties. I am an out of state investor based in Northern Virginia and primarily invest in Cleveland in SFH and small multi family units. 75k downpayment can get you a small apartment building. Let me know if you want to connect
That could be awesome. What’s the ROI on a small apartment building?
0 Reply
Aj Parikh
Rental Property Investor · Centreville, VA · Member since 2019 · 1k+ posts · 799 votes
4y
Recently we are under contract on a 4 plex in lakewood at $215,000 and we are looking at at ROI of 7%
0 Reply
Josh Harper
OP
Real Estate Agent · Coeur d’ Alene, ID · Member since 2022 · 17 posts · 6 votes
4y
Quote from @Aj Parikh:

Recently we are under contract on a 4 plex in lakewood at $215,000 and we are looking at at ROI of 7%
Where is the best place to find properties like that?
0 Reply
Aj Parikh
Rental Property Investor · Centreville, VA · Member since 2019 · 1k+ posts · 799 votes
4y
I would suggest networking on these forums and finding a rockstar realtor and property management to work with and once you build that relationship, you should be able to find these deals.
0 Reply
Chris Davidson
Real Estate Agent · Boise, ID · Member since 2016 · 1k+ posts · 888 votes
4y
Quote from @Josh Harper:

Do you think this is a solid plan or would I be better off buying 2-3 strs annually in lower price point areas. Im sure. you are familiar with our prices up here being from Boise.

You are on the right path of working out a strategy. But don't rush this phase, granted you can pivot, but if you end up with a STR, SMF in town, and STR, SF, MF out of town you will spend more time keeping tracking of each one that is not similar to the other and have some rougher systems. At that point your ROI might look great but you won't be factoring in your time. Find out what you are passionate about up for the work. STR require a lot more work than a LTR, but pay more especially in your area. Maybe you House hack do a STR, roll that for a few years and as you get busier turn it to LTR. Maybe you just work in your town and invest more passively out of town, and buy into someone's systems vs building your own. I would caution chasing a ROI, IRR or cash on cash return numbers. Look at the investment and if it fits your needs. Year 1 numbers are never the same as year 5 or 10, and if you are planning to never sell you don't have to worry about capital gain taxes. However if things don't go as planned then you do.
Best of luck mate!
0 Reply
Steven Foster Wilson
Rental Property Investor · Columbus, OH · Member since 2017 · 3k+ posts · 3k+ votes
4y
Quote from @Josh Harper:

Hi everyone, I'm a current agent and interested in purchasing 10 personal homes over the next 10 years. Every year I plan on renting out my previous home and buying a new primary. I am licensed so my commission will go towards my down payment so I will have very little out of pocket ever year. Is this a good way for me to accumulate properties or is there a better ROI out there? I have about 75k liquid right now and am currently renting. Thoughts?
Thanks in advance.

I think it depends on what your goals are. For me, that would be a little too slow. Just this year I have been able to pick up 20 more properties. I would refinance and take that money to do more. After I did my first BRRRR I was then able to buy a 3 unit and the ball just kept rolling. I like the thought:
1 Reply
David M.
Morris County, NJ · Member since 2020 · 5k+ posts · 2k+ votes
4y
@Josh Harper
Just make sure going out of state is what you want to do. Its different than self-managing. It might be nice money but it has to work for your mindset.
Syndications are basically to my understand when a bunch of usually unrelated investors passive pool their funds together to invest. The key is having a good syndication manager, not a property manager, that will be running this fund. These aren't exactly simple as they are usually SEC registered even as private funds. There are some threads on bp on this, but definitely research this.
0 Reply
Anna StrausbaughBusiness Member
Real Estate Agent · Boise, ID · Member since 2018 · 119 posts · 70 votes
4y
Quote from @Don Spafford:

If you plan to live in each property anyway, then why not househack better? Buy some 4 plexes in the mix, live in a unit for a year, then another, and so on. You can still reserve some of the units for STR if you would like or rent them all as LT. But then you also have the other units covering your mortgage in the meantime so that you can accumulate more cash savings. That's what I would do. Currently though I am more focused on passive income through syndications so I don't have to deal with tenants and problems.
If I had the flexibility to move that often and house hack, this would absolutely be my strategy. You could have 10+ doors in no time if you just live in one unit of a multi-family property. No question, the fastest way to get more doors at the lowest possible interest rates.
[email protected]208-890-5236
1 Reply
Don SpaffordPro Member
Investor · Idaho Falls, ID · Member since 2016 · 912 posts · 629 votes
4y
Quote from @Josh Harper:
I have heard a few times now about syndications. Can you tell me more?
Basically it is totally passive for you. You invest with a group of other investors into larger multi-million dollar properties. Such as apartment buildings, self-storage, mobile home parks, or as in my case build-to-rent multi-family AND RV Resorts. Depending on the asset class, you can get great cash flows, large depreciation expenses, big equity upside, and be completely hands off. No worries about renting units, managing tenants, fixing problems, etc. You can usually at least double if not triple your investment over a 5 year period. I go for the triple ones with 15%+ cash on cash, and also some that have little to no cash flow up front (build to rent) but double or more the investment in 2-3 years and then enjoy infinite returns from the cash flows for many years after. Essentially in that same 10 year time period of buying homes every year, you can still 10X your money but with very little work. With the build to rent they usually have multiple phases for 600+ doors, so you could basically invest $100k in year one and by the time it is done in about 8-10 years, come out with $1M and infinite return cash flows. But then also have that ~$1M to reinvest into other opportunities. I invest in the development projects for quick returns and compounding wealth, and also the RV Resorts for big cash flows from day 1. I'd be happy to discuss it more if you would like. DM me and we can set up a call.
1 Reply
Amy Heitner
Specialist · Huntingdon, PA · Member since 2018 · 162 posts · 147 votes
4y
Quote from @Josh Harper:

I have heard a few times now about syndications. Can you tell me more?

To borrow a well used illustration...when you fly on a passenger plane you are part of a syndication...which basically means people pooling their resources to purchase something they could never afford on their own. In a multifamily syndication you pool your resources with other investors to buy an apartment building, a passive investor or Limited Partner is like a passenger on that plane and the General Partners are like the pilots. They are the ones who do all the heavy lifting.

1 Reply
Lane Kawaoka
Rental Property Investor · Honolulu, HAWAII (HI) · Member since 2011 · 4k+ posts · 2k+ votes
4y
Good plan to start out but as you become accredited you will realize that its not scalable and you will drift to syndications... likely after house 4-5 or when your net worth goes over 500k.
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Josh Harper
OP
Real Estate Agent · Coeur d’ Alene, ID · Member since 2022 · 17 posts · 6 votes
4y
Quote from @Lane Kawaoka:

Good plan to start out but as you become accredited you will realize that its not scalable and you will drift to syndications... likely after house 4-5 or when your net worth goes over 500k.
What would you recommend instead?
0 Reply
Bud Gaffney
Rental Property Investor · Boston, MA · Member since 2019 · 2k+ posts · 1k+ votes
4y
@Josh Harper love it man! DO IT!!!!
0 Reply
Lane Kawaoka
Rental Property Investor · Honolulu, HAWAII (HI) · Member since 2011 · 4k+ posts · 2k+ votes
4y
LP deals where you let the professional do the hard work, take on the risk, and leverage their connections.
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