I am currently selling my primary residence (4/1) which is located in central Tx in a great little town off i35 with a private university within 200 yards of the doorstep. Over the last 3-4 years I have remodeled the kitchen and living room; it will appraise around 130k and I owe 97k. I am currently under contract to sell at 125k.
I just got introduced to the BRRR strategy by my new business partner who is also my brother. We, along with my cousin have recently started an LLC to get into the real estate market.
Considering these details, is the BRRRR something I should take advantage of to leverage capital into my new business; is there room to make something happen?
Hello Austin! Are you asking if you should BRRRR your current home? Isn't it already in contract? Or are you asking if you should take the proceeds from the sale and start using the BRRRR strategy? If so, absolutely. The BRRRR strategy, well, it just works. Read the book, follow the guidelines, and I am sure you will do just fine.
Also, some unsolicited advice, get an operating agreement with your new partnership. Partnerships can be extremely difficult no matter how good they start out. It's best that everyone be on the same page and agree to their roles.
We are still within the option period on the sell; with only a few more days left. I was considering taking it off the market and looking for a renter as me and my wife are already living in another location (RV) so I would be able to put a potential renter in pretty quickly. I am most certainly going to get the BRRRR book after considering things from this angle.
Thats a tough one for me. To be honest I hate when seller/buyer backs out last minute. I don't like it happening to me so I try my best not to do it to others. That is going to have be a personal decision for you. If I am in your shoes I go through with the sale and start my BRRRR journey with the next property. Either way I wish you luck!
Fair enough. Thank you for the advice.
@Austin White It all depends on what you can rent it for, and what the current mortgage is. But, it is something that you should consider
@Jason D. We went ahead and decided to rent this property because of the massive amount of interest that shown on the property when I advertised it over the basic (free) real estate platforms. My mortgage is currently $749 and was able to sign a great family into the lease on a annual contract at $1200 with a 1 month's rent (refundable) security deposit. Because of its location with-in the city of Belton (great school district and private christian university), I had 3 separate families with comparable applications trying to "out-bit" each other for this house; increasing my original rent price from $1075. Over this next year, we are planning on adding a bathroom to the house to make it a 4/2, in hopes of being able to invest the equity gain towards a multi family development.
Highpoint Investors LLC