You're actually starting with something valuable: your first property has already taught you that equity and cash flow are two different things.
There's nothing inherently wrong with an equity hold, but if your objective now is building a portfolio that produces income, I'd make cash flow one of the requirements of the next acquisition rather than hoping it appears later.
Since you're looking at BRRRR, one thing I'd suggest is starting with the last R — refinance — before buying anything.
A lot of investors analyze:
Buy → Rehab → Rent
and assume they'll figure out the refinance afterward.
I'd analyze the entire cycle before making the offer:
Buy → Rehab → Rent → Refinance → THEN decide whether it's a deal.
Before you buy, estimate the realistic after-repair value, stabilized rent, taxes, insurance, operating expenses and what the refinance is likely to look like at today's rates and lending guidelines.
Then ask:
How much of my original capital comes back?
How much equity remains in the property?
What does it cash flow after the refinance?
How much capital do I have available to do the next one?
That's what determines whether your BRRRR strategy is actually repeatable.
Since you mentioned not wanting to continue putting 20%–25% down, I'd look at the financing for the acquisition and the exit as one strategy, rather than treating them separately.
Seller financing, private money, subject-to and other structures can all potentially reduce the amount of your own capital tied up in the acquisition.
On the refinance side, I'd compare conventional and DSCR options based on what produces the best overall result for that particular property.
I would also take a look at your existing Nashville condo before assuming the only capital available for the next acquisition is cash you have sitting in the bank.
If there's sufficient usable equity there, it may be worth investigating whether an investment-property HELOC or second-position program could give you access to some of that capital without selling the condo or disturbing the existing first mortgage.
Whether that works will depend heavily on the condo's value, existing debt, rent and total housing expense. Since you said it currently doesn't cash flow, I certainly wouldn't assume the numbers work—but I'd at least run them before ruling the equity out as a potential source of liquidity.
But I wouldn't make creative financing itself the objective.
The objective is buying a good property with a financing structure that supports the business plan.
And there's one trap I'd watch for given what you've already experienced with your Nashville condo:
Don't confuse getting most of your money back at refinance with having a successful BRRRR.
You can execute the refinance perfectly and still end up owning another property that doesn't produce meaningful cash flow.
You already know what that feels like.
I'd rather leave a little more equity in a genuinely strong cash-flowing property than pull every possible dollar back out and turn it into another equity hold.
For every property you're considering, I'd model:
Purchase price
Renovation budget
Total basis
Conservative ARV
Stabilized rent
Operating expenses
Expected refinance amount and cost
Cash remaining in the property after refinance
Cash flow after refinance
Return on the equity left in the property
And then stress-test it.
What happens if rehab runs 10% over budget?
What if rent is $150 lower?
What if the appraisal comes in 10% below your projected ARV?
What if the refinance rate is 1% higher?
If the deal still works, now you've got something interesting.
As far as where the deals come from, I think you're already heading in the right direction by wanting to get into the local investor community.
Agents, wholesalers, property managers, contractors, lenders and other investors who are actually operating in the neighborhoods you're targeting can tell you much more about where deals are really being found than another hundred posts about creative financing.
And working in fine dining may actually give you an advantage that has nothing to do with real estate.
You already understand relationships.
Real estate investing is full of people chasing properties.
I'd spend some of those open daytime hours building relationships with the people who see the properties before everybody else does.
That's where I'd start.
