Real Estate Agent 路 Dallas, TX 路 Member since 2017 路 136 posts 路 141 votes
How did you transition from 20% down on turn key/mostly ready properties to BRRRRing and/or any other sort of buying off market deals cash? Given my market, Dallas, every time I save 40kish my first thought is let鈥檚 get pre approved for another rental!
1.) Did you guys just sit around until you saved up enough to afford a property + repairs in cash?
2.) Did you kick it off with a hard money loan? (Seems risky for FIRST BRRRR)
3.) Did you buy a bunch of 20%ers until a couple appreciated enough to sell/cash out refinance?
Rental Property Investor 路 Carrollton, TX 路 Member since 2013 路 750 posts 路 538 votes
6y
I went straight to BRRRR and have used the hard-money route throughout. If you are working with a good hard-money lender, they will be part of your team and will be a great sounding board to make sure the deal is a good one...if anything, having that extra set of eyes on the deal is less risky in my view. Plus if you are buying right, with a good spread to where it makes sense to even use hard-money, you should have a decent equity cushion to absorb minor missteps.
Rental Property Investor 路 Carrollton, TX 路 Member since 2013 路 750 posts 路 538 votes
6y
I went straight to BRRRR and have used the hard-money route throughout. If you are working with a good hard-money lender, they will be part of your team and will be a great sounding board to make sure the deal is a good one...if anything, having that extra set of eyes on the deal is less risky in my view. Plus if you are buying right, with a good spread to where it makes sense to even use hard-money, you should have a decent equity cushion to absorb minor missteps.
Real Estate Agent 路 Dallas, TX 路 Member since 2017 路 136 posts 路 141 votes
6y
@Andy Webb I hadn鈥檛 thought about that aspect of gaining mentorship from a hard money lender just as I鈥檝e had with my current lender. I see you鈥檙e in my area, good to know there鈥檚 a healthy BRRRRable market here
Farmers Branch Texas 路 Member since 2019 路 11 posts 路 2 votes
6y
I am also in the Dallas area. I have done the same thing now I'm trying to do my first BRRRR. I've thought about teaming up with an investor but not sure if I should. Would it be good to do it once with a partner
Real Estate Agent 路 Dallas, TX 路 Member since 2017 路 136 posts 路 141 votes
6y
@Steven Schaad Nice, how many years now? I just got started over a year ago and in the oak cliff area of Dallas. The whole metroplex is pretty great as far as appreciation is concerned imo
How did you transition from 20% down on turn key/mostly ready properties to BRRRRing and/or any other sort of buying off market deals cash? Given my market, Dallas, every time I save 40kish my first thought is let鈥檚 get pre approved for another rental!
1.) Did you guys just sit around until you saved up enough to afford a property + repairs in cash?
2.) Did you kick it off with a hard money loan? (Seems risky for FIRST BRRRR)
3.) Did you buy a bunch of 20%ers until a couple appreciated enough to sell/cash out refinance?
With how tight the markets are across the USA I'd imagine you'd be looking for a needle in a haystack if you were trying to get a BRRRR so profitable that you were able to pull all of your money back out AND pay of a HML. Not a practical scenario for anyone to just jump into. Takes $1,000's and $1,000's spent on marketing and infrastructure every month to find seller's that distressed and be able to pull everything off on time and on budget to do something like that.
@James Wise that鈥檚 my concern. That there are so many variables dependent on my ability to very accurately predict costs and time frames
Then you should stick with turnkey. BRRRR's isn't really investing so much as it's running a construction and marketing business.
Excellent way to say it James. I am still looking to do a BRRRR but it really has to be a unique situation, and the market is pretty tough to find one worthwhile right now. The BRRRR model is exciting but just not as repeatable as you'd like.
Residential Real Estate Investor 路 Kansas City, MO 路 Member since 2014 路 10k+ posts 路 5k+ votes
6y
Probably the best way to finance BRRRR deals is with private money. Partnerships can work as well. The key thing, though, is the quality of the deal. If you can buy at 70-75% market value, it will be much easier to convince someone to lend on that property.
@Andrew Syrios just a small nit but for BRRRR to be really effective, you want to be all in at 70-75%. This includes closing, holding, rehab and refi costs.
I like where your mind is at. The more questiosn you ask the more you will learn. As well as the people in which respond and lend advice all have their own strategy and different expierences that led them there.
It's good to look at ways to use other people's money, with your own to purchase and invest in properties you normally would not have been able to, or would have had to wait substanillay longer before aquiring it.
I believe as in Investor doing Fix and Flips/BRRR, the amount of houses you can put through that process in a given time frame, will directly affect how successful you will be at it. Depending the type of lending you recieve, will determine how any properties you can purchase in a year and at what cost. Everyone's end game is different, people have different goals in mind on how they will one day retire or semi-retire. That being said, we all pretty much can start at the same point with the same weapons at all disposal, but are paths to the end, most times will be different.
Its important to know what your goals are for Now and in the future so you can best plan each strategy you look to deploy.
Rental Property Investor 路 Brooke Park Drive 路 Member since 2018 路 1k+ posts 路 2k+ votes
6y
You鈥檝e started with the ez shopping route and now you want to switch to tough route. Not often in life is that ez to do, now that all you know is ez turnkey route that doing brrrr will feel like crap work to you
Real Estate Agent 路 Cincinnati, OH 路 Member since 2017 路 51 posts 路 63 votes
6y
@Ivan Loza I think the BRRRR strategy is a lot like flipping. It can be really sexy but it requires you constantly find the next deal, execute, then constantly beat your best score so to speak. I think finding turnkey in growing markets is the more sustainable method.
Real Estate Agent 路 Dallas, TX 路 Member since 2017 路 136 posts 路 141 votes
6y
@TJ Watson @James Wise makes sense it does sound like a lot more hours. Especially at the beginning without a team and system in place. Probably not best for me right not that I鈥檓 a full time teacher and realtor
Real Estate Agent 路 Dallas, TX 路 Member since 2017 路 136 posts 路 141 votes
6y
@John Wright yeah the fact that I live the fastest growing metroplex (with no signs of stopping) makes me lean towards just getting as many as fast posible. Sit back, collect rent and watch them appreciate.