Investor · New Orleans, LA · Member since 2019 · 9 posts · 2 votes
So I'm wondering how much cashflow people generally find they can clear per month for each BRRR property they are doing. Let's assume you've bought a house at a fairly good price either off market or on the MLS. There's a loan I can work with in my area to purchase and rehab houses for low money down (and then refinance out after the rehab). I just want to know how many BRRR duplexes, 4 plexes or single family's it will take to get to $4000 per month which will get my family to the other side of the Rat Race given our current cashflow vs. expenses breakdown. Would love to hear your thoughts on this. Thanks so much
@Casey Groves, I agree with Jaron, IF you can find a property that can cash flow $200/month with real expenses and adequate reserves, you are doing well in my market as well.
I mention adequate reserves because I see a lot of people under reserving, in my opinion. 5% per month on $1,000/mo rent is only $50. If a fridge goes out, that wipes out more than a year of reserves. Roof replacement: about 10 years of reserves at 5%.
That being said, if you can find it, you would need 20 units for $4,000/mo. 40 units @ $100/mo.
At $200 cash flow each, and with some partners, I need 32 doors. You would need 20 doors. Although I find that in my market I can cash-flow upwards of $500 per door if not more depending on the situation. I believe Brandon Turner has a minimum of $200 cash flow after expenses for every door so that should help set your goals and expectations. It is a marathon, not a sprint. If you can rehab quickly and refi to get all your money out, then that really helps keep the pace up.
@Casey Groves It's still a sellers market in most markets and I think people have money regardless of the COVID-19 speed bumps. With that said, in my market if you can BRRRR and pull (ReFi) most or all of the upfront cash invested and cash-flow $200 per month that's a d**m home run.
It's fun to think about the number units needed to reach X goal, but it's scary knowing the difficultly of that in 2020.
@Casey Groves, I agree with Jaron, IF you can find a property that can cash flow $200/month with real expenses and adequate reserves, you are doing well in my market as well.
I mention adequate reserves because I see a lot of people under reserving, in my opinion. 5% per month on $1,000/mo rent is only $50. If a fridge goes out, that wipes out more than a year of reserves. Roof replacement: about 10 years of reserves at 5%.
That being said, if you can find it, you would need 20 units for $4,000/mo. 40 units @ $100/mo.
Thanks so much everyone! I was hoping I'd be 5 duplexes away from financial freedom. Five'll definitely get me closer, but 10 sounds like it'll get the job done. I'll definitely keep my day job for now. Thanks again! Much appreciated feedback.