How to spend time when waiting for refinancing of BRRRR's

Question

Background:

We recently purchased 3 single family homes in Oklahoma City using our HELOC.  Our intent is to rehab all three homes and refinance to (hopefully) get most our initial investments to then purchase other BRRRR properties.  Rehab is complete at one of the three units.  We plan to refinance all of the properties in November.  This ties up most of our cash.

Question / TLDR:

What should we be doing in the meantime until we refinance our properties and start the buying cycle again?  Right now we're looking at deals and researching areas where we might want to buy.  What else should we be doing?

Cassi Justiz · Answer

Account Closed is spot on.

The rental market is fairly slow right now and will stay that way during the winter. Start watching the markets near your homes and see what properties are getting rented fast and which ones are sitting. Go ahead and start your marketing now, especially if your rehabs are almost done. MOST responsible tenants are going to give a 30 day notice after they get their rental application approved, so even if you get leases signed tomorrow it may be a month before they start paying rent.

I would also start working on your financial documents and interviewing banks. You may already have this set up, but if not now is a great time to do this. You definitely don't want to show up to the bank ready to refi and have to try to come up with all of the business docs that haven't been updated for a year.

Good job on getting this ball rolling! It's hard to find really great BRRR properties in OKC right now, so it sounds like you are doing something right!

Landon Whitt · Answer

November is right around the corner so you don't really have too much time to burn. Renting in November can be slower than the warmer months as people are less likely to get the motivation to pack unless the have too and local "have to" moves are often trouble filled.

If it were me I would pay close attention to properties for rent on zillow in your target area that are sitting on the market longer than 30 days look at what the amenities are and try to avoid making those mistakes. As men we always like to take action, sometimes the best action is insuring the basics are taken care of right.

Get your three homes renovated for max rent and refinance value and get tenants in the home cash flowing and then make your next move. There is plenty of time to search for the next deal and last time I checked the high margin deals are pretty much gone unless your looking to work south of 40 and north of 240. Hold your position and follow through. Thats my two cents.

Kory Dieter · Answer

Awesome, thanks for your input @Landon Whitt and @Jonathan Bombaci!

Jonathan Bombaci · Answer

I would use the time to work on the foundation of your business and to network. I use the downtime in the winter to work on getting systems set up and figured out and planning out the next year. If you haven't come up with a financial plan for the projects and the rest of 2020 then now is the perfect time to do that.

Otherwise just get out there to networking events and meet people. I promise you'll learn something from every event you go to and from every person you give a chance to teach you something. Any one of those things you learn has the potential to save you time and money down the road.

Best of luck and congrats on doing a 3 single family BRRRR that sounds like a heck of a project.