All Forum Posts by: Caleb Scott

Here's my problem. I am looking to invest in Springfield mo and try my hand at BRRRR. I like the area because there's plenty of run down single families for sale anywhere from 30-50k much of the time (prime candidates for a BRRRR) but then I hit a problem. Properties aren't only cheap here. So is rent. So even if I bought a fixer upper for 40k put 20k into rehab, all in for 60k got it rented and refinanced and say it comes back for 100k. I get the refi for 75k and get some money out of it! That seems plausible in the area. But the average mortgage of a 100k house here is about 600$ the average rent of a 2bed one bath house up here is about 800. So nice, I cover the mortgage, but what about cap x, repairs, vacancy, and eventual property managers budget? Is this market just not going to leave Me cash flowing rentals? Any advice or critiques of my thinking welcome. I want to build a detailed plan to BRRRR to lvl 1 financial freedom, but to do that I must leave behind at least 200$ pure cashflow a SFR. And I'm not sure if I can do that here anymore. Is it the market or me? What can I do?

So say I find a rundown multi family. Is it reasonable enough to do a 203k loan, so that I can tie in my rehab costs with the mortgage, and if so how is the amount allocated for the rehab assessed and approved? Do I choose? Also is it reasonable to do a brrrr house hack? And if so when I refinance (if all goes to plan) at the 6 month mark, could I move out not currently having to go through an entire year to fulfill the usual FHA terms? Or is it new loan new rules allowing me to move and put the money from that deal into the next one?

Thanks for the help. I feel that If I can pull off one successful investment that makes monthly cashflow I’ll be able to just repeat and learn and be able to support my girlfriend and I and give us the life we’d like. 

I am working my way to take the jump into my first investment. I am very determined, but spending some time to craft a plan to help ensure a hopefully smooth ride into this new frontier. 

I am moving out of my apartment and back in with my parents and transferring to be an remote employee so I can save faster and 100% of my income. Then the plan is to do an FHA loan and house hack a triplex. By the following year I should be able to save 30,000-40,000$. and I'll be ready to get my second property. Though here is where I have some options. Should I...

1) Continue to house hack the new properties and just scale up once a year that way, or are there limitations to the FHA loans to prevent this?

2) Or should I do a BRRRR, on a rundown fourplex? but if i go that route, i was wondering what kind of financing would be preferable in that situation. Could I still get the FHA for a BRRRR and house hack it? I know some conventional lenders may have issues loaning on a place that needs some rehabbing. And also with the BRRRR method, does the rehab budget have to come out of pocket? Also what's the best route for refinancing? Will it be a problem to go through banks who are judging me off my DTI, Credit score, and W2 job? is Hard money preferable?

Thanks for helping out with this as i continue learning, I just figured out the BRRRR method may help me scale double time, but there are many more moving parts that a new investor could mess up, luckily I am a planner to the bitter end, so lets get this going! Thanks guys.

Thanks for the reply! I was thinking as long as I do background checks and meet the tenants before hand there should be no reason renting by the room in a college town would be an issue. Awesome! It seems to be the only way most of these house hacking deals would actually work and have me break even. I am in Missouri, and while our prices have just jumped, people tell me we are still one of the cheaper states for real estate. We're in a more rural area so many houses come with land if not at least a large yard which would be ideal for the RV, and as long as that does not go against the terms of the FHA loan or any city zoning criteria I would enjoy that (as well as the additional cashflow!).

Thank you! I'll get on finding my first rent by the room house hack deal, (possibly from the backyard in an RV)!

Hey! Thanks for your time, I'm looking to kick off into the industry with a house hack to get me started. The only issue is after running the numbers and including not just the mortgage, but cap X, repairs, PMI, P&I, ETC... every deal seems to run flat with normal "rent one side of a duplex and live in the other, even with a roommate" type equations, so my question is this:

1) say i find a cheaper 5 bedroom house with a good location near a university. Im in my early 20s myself, so I could see renting by the room to college kids, but my dad is of the opinion i'll spend all my days chasing down rent and preventing property damaging parties, or catching people doing hard drugs. Does anyone have experience renting by the room enough to tell me if proper screening could prevent this? Often times its the only way many deals look half descent. (I think it would not be as bad as he thinks).

3) any other ideas how I can make these deals better?

2) Where could I check to see if its legal in my area to say build a tin parking structure and live in an RV full time in the backyard, after all I only plan on making it my primary residence for one year, and my job is online so location doesn't matter much to me and I end up traveling between cities often to spend time with family and friends. Or would it be better to build a simple ADU on the property for me to stay in, maybe renovating an old shed or pool house, then that's just one more room to rent once i move?

I'd love to hear anyone's thoughts or ideas who may have more experience, as I am new to all this. Thank you all so much for the time!