i'll tell you what it needs, wont tell you how much it costs me.
- paint
- trim
- very light demo + dumpster
- trim, a little flooring fix, commonizing the look and harden it (bath fans, remove storm doors, put fake bottoms in sink cabinets, add a tub grid drain, etc)
Do you find all of your deals on the MLS? Off? Mix?
i have purchased total of around 38, but wholesaled 4 to other investors. but out of the 38, i think 33 were MLS, 2 were homeowners in distress, and 3 referrals (pocket listings).
Congrats! New BP member here. Excited to buy and hold in the near future and build a business similar to yours. Are you using the Brrr technique? One question I cannot seem to figure out is related to the big picture financing. Here is my question:
How are you able to buy multiple properties a year using the Brrr technique and continue to get lending on the refinance each time? (Refinancing the loan to remove private lender and put property in your name) Wouldn't you be adding more and more debt each property (which would factor into your next refi) and then you would not be able to use the cash flow from these properties for a year or two? Does your lender on the last refi step allow you to use your recently added cashflow for your next deal?
I thought the same thing. After sitting with my mortgage broker she explained to me this, the rent coming in works into your debt to loan ratio. This income is just that income. So it works in your favor. Banks like that the property makes money.
Do you use any special program to trac your expenses on all your properties? I have a few properties of my own and find it hard to track all the expenses and repairs.
Congrats! New BP member here. Excited to buy and hold in the near future and build a business similar to yours. Are you using the Brrr technique? One question I cannot seem to figure out is related to the big picture financing. Here is my question:
How are you able to buy multiple properties a year using the Brrr technique and continue to get lending on the refinance each time? (Refinancing the loan to remove private lender and put property in your name) Wouldn't you be adding more and more debt each property (which would factor into your next refi) and then you would not be able to use the cash flow from these properties for a year or two? Does your lender on the last refi step allow you to use your recently added cashflow for your next deal?
PLEASE ANYONE FEEL FREE TO COMMENT!
Thanks for any feedback!
once you get comfotable with the concept you will understand that the only way to do the brrrr strategy is to buy below market. so when you put your own money and then refi, you get exacly what you put in.
so, a sample scenario...
if ARV is 100k
you purchase for 60k
repairs $20
you refi at 80% of the $100k, so you get 80k back out
most banks wont give you 80% on the ARV, so this means, you need to either buy it for 50k + 20k repairs OR 60k +10k repairs.
as long as you have cashflow at the end of the REFI process, you are good to go.