Traditional vs Brrrr

[Robert Lopez]

Hi, I am looking to invest in my first buy and hold rental and I am not sure if I should take the traditional or brrrr approach. I certainly see the benefits to the brrrr approach but with no experience I sometimes believe I should take a traditional approach to minimize risk and learn the ins and outs of purchasing, maintaining, and managing a rental home. Any feedback would be greatly appreciated.

[Erik Estrada]

Hey Robert, 

Why not start with a House hack to ease the transition? Or partnering up with another investor, save some of your own cash and split the profits while you learn? 

[Olivia Radziszewski]

@Robert Lopez- Everyone's journey is different! The most important thing is that you just take the plunge and get started. I, myself, started with the traditional approach and built up from there. 

[Mike Dymski]

It does not have to be one or the other.  Many investors buy property with traditional debt, fix it up, raise rents, and do not refinance it.  The decision then comes down to whether or not you want to rehab...and if you need to add value and refinance in order to buy additional properties.

[Ricardo Hidalgo]

Quote from @Robert Lopez:

Hi, I am looking to invest in my first buy and hold rental and I am not sure if I should take the traditional or brrrr approach. I certainly see the benefits to the brrrr approach but with no experience I sometimes believe I should take a traditional approach to minimize risk and learn the ins and outs of purchasing, maintaining, and managing a rental home. Any feedback would be greatly appreciated.

 Do not be anxious to pull out equity just to buy another property. Let it stabilize and cash flow with good reserves before becoming over leveraged. I would wait until rates dropped or unless you found a great deal for second purchase. 

[Eliott Elias]

Take risks, you will build up calluses  large enough to take on any deal. 

[Eliott Elias]

Take risks, you will build up calluses  large enough to take on any deal. 

[Robert Lopez]

Quote from @Erik Estrada:

Hey Robert, 

Why not start with a House hack to ease the transition? Or partnering up with another investor, save some of your own cash and split the profits while you learn? 

 Hi @Erik Estrada,

Thank you for your feedback Erik. I have considered a house hack but had a few obstacles. I will rerun the numbers and reconsider it as an option. As far as partnering with another investor, do you have any recommendations on how or where I could find an investor willing to work with me?

[Robert Lopez]

Quote from @Olivia Radziszewski:

@Robert Lopez- Everyone's journey is different! The most important thing is that you just take the plunge and get started. I, myself, started with the traditional approach and built up from there. 

 Hi @Olivia Radziszewski,

Thanks for your input Olivia. I agree, I do not want to enter analysis paralysis. I have goals written down and dated. I will be sure to stick by them.

[Robert Lopez]

Quote from @Mike Dymski:

It does not have to be one or the other.  Many investors buy property with traditional debt, fix it up, raise rents, and do not refinance it.  The decision then comes down to whether or not you want to rehab...and if you need to add value and refinance in order to buy additional properties.

Hi @Mike Dymski,

Thank you for your input Mike. Perhaps buying a property that needs only smaller repairs is a good way for me to gain experience without dealing with the risk of doing a full rehab. It will also allow me to increase rents. I will keep this in mind as I analyze deals.

[Robert Lopez]

Quote from @Ricardo Hidalgo:

Quote from @Robert Lopez:

Hi, I am looking to invest in my first buy and hold rental and I am not sure if I should take the traditional or brrrr approach. I certainly see the benefits to the brrrr approach but with no experience I sometimes believe I should take a traditional approach to minimize risk and learn the ins and outs of purchasing, maintaining, and managing a rental home. Any feedback would be greatly appreciated.

 Do not be anxious to pull out equity just to buy another property. Let it stabilize and cash flow with good reserves before becoming over leveraged. I would wait until rates dropped or unless you found a great deal for second purchase. 

Hi @Ricardo Hidalgo,

Thank you for your reply. I do have my second purchase in mind while I search for my first purchase. But making sure I am not over leveraged is certainly something I will keep in mind. Finding good deals that cash flow well is certainly a priority this way I don’t find myself in a pinch. Thanks again and I will keep this in mind as I make moves.

[Robert Lopez]

Quote from @Eliott Elias:

Take risks, you will build up calluses  large enough to take on any deal. 

 Hi @Eliott Elias,

BOLD! You should be a mentor! Thank you for your response Eliott. I do agree with you.  However, I believe that TOO great of a risk could be dumb. I must consider EVERYTHING, including analysis paralysis. But I know I am capable of succeeding at anything I put my mind to and your motivating me to go after it. Thanks again Eliott!