All Forum Posts by: Cassidy Burns

Awesome info! Thanks @Michael H. Cook

@Sidney Alexandre you can do a BRRR strategy in Washington DC, mostly in the row home / duplex sectors. BUT, be prepared to have lots of cash available, whether it's your own or someone else's, but you do need cash to be in that game in the Washington DC area.

Best of luck.

Investment Info:

Small multi-family (2-4 units) buy & hold investment.

Purchase price: $50,000
Cash invested: $25,850
Sale price: $112,846

BRRRR Deal Executed and now turning into a 1031 exchange! Lets take a look at the numbers

What made you interested in investing in this type of deal?

Ability to take my cash out after 4 months while still cash flowing

How did you find this deal and how did you negotiate it?

Realtor.com.. Used realtor to negotiate it, came in $15000 below asking price

How did you finance this deal?

Bank Financing.

How did you add value to the deal?

Slight Rehab and getting property tenanted.

What was the outcome?

Success

Lessons learned? Challenges?

Time IN the market is better than TIMING the market

Investment Info:

Small multi-family (2-4 units) buy & hold investment.

Purchase price: $50,000
Cash invested: $25,850
Sale price: $112,846

BRRRR Deal Executed and now turning into a 1031 exchange! Lets take a look at the numbers

Original Purchase: May 16, 2018
-Purchase Price: $50,000
-Closing Costs: 2,700
-Rehab Costs: $10,650
Total All In Cost: $63,350

How I Financed Originally:
-25% Down Commercial Financing ($12,500 down)
-$37,500 Loan Amount - 5/1 ARM amortized over 20 years
-5.25% Interest Rate
-Monthly Payment: $365/month

Refinance Period:
-Refinanced following completion of construction 4 months later

New Loan: October 2018
-Appraised Value: $94,500
-New Loan: $67,500
-Closing Costs: $1,500
-6.29% Interest Rate - 5/1 ARM 20 Year Amortization
-New Payment: $692/month

I was able to take all of my original money out of the deal and pay myself a small $4,250 tax free payment "Just Because 😏 "
I now have $0 in the deal

Current Rents: $1,049/month
Current Cash Flow After Refi: $357/month

Resale Date: December 2021
-Sale Price: $112,846
-Current Loan Amount: $55,422
-Closing Costs: $3,350.92
-Commissions: $6,635.34

Total Net Profit: $46,123.64

I"ll now be doing a 1031 exchange and rolling that into a longer term multifamily building. Now that is how you execute the BRRRR strategy.

What made you interested in investing in this type of deal?

Ability to take my cash out after 4 months while still cash flowing

How did you find this deal and how did you negotiate it?

Realtor.com.. Used realtor to negotiate it, came in $15000 below asking price

How did you finance this deal?

Bank Financing.

How did you add value to the deal?

Slight Rehab and getting property tenanted.

What was the outcome?

Success

Lessons learned? Challenges?

Time IN the market is better than TIMING the market

In my opinion, you need to leverage as much as you can, for as little as you can.  

Meaning, purchase in DC using primary residence financing with 3-5% downing conventional financing, obviously making sure the numbers are break even for when you move out.  Keep your cash accessible so you and your partner can go and buy another property in another market strictly as an investment.  It would be silly, in my opinion, to go somewhere to chase cash flow where you aren't familiar and already knowing that prices are inflated.  It puts you at a disadvantage.

My advice. Use primary residence in the DMV using low money down ($15,000-$30,000) and use the remaining cash to try your hand in a another market.  Diversifies your risk, allows you to potentially capture that high appreciation, while also forcing you to find an even better deal in the lower priced market. 

Best of luck.

Russel ! Would love to join.

Also, get @Michael H. Cook as the Shenandoah Valley agent as well! 

I'd buy another using primary residence financing in Washington DC.  The secondary home market currently is oversaturated and I think will see a slight correction in the near future.  Take advantage of being in a strong market, while buying assets that will see steady and strong appreciation in the future.  Concentrate on great locations.

Best of luck! 

Hey @Logan Karanovich , welcome to RE Investing.  House hacking is one of the best strategies in DC/ DMV, because as you said, the DMV properties are a higher price point.  

That being said, you can utilize 2 different House Hacking Strategies :

1.) Buy a single family / duplex with an FHA financing (3.5% down) and rent out one unit and living in the other. This is the more expensive strategy, as duplexes are $900,000-$1,100,000 meaning you have to qualify for that asset.

2.) Buy a 2-3 bedroom condo, get roommates, use 3% down conventional financing with lower PMI, have your roommate pay a % of your mortgage and then turn it into a rental . This is going to be the cheaper of the other 2 options: $550,000-$650,000 is a good price point.

Best of luck! 

Hi All, 

I’m opening up this conversation back up.  @Zach Stroud , are you still actively buying in this area? I”m considering buying something as a secondary home but seems that inventory is low for the Sub $600,000 price point.  Would appreciate any insights / suggestions for property managers / realtors to talk to in the are. 

Greatly appreciated. 

Hi @Brandon Dawson I know this market has very tough regulations for STRs.  I"m actually looking for long term rentals with the best potential appreciation. 

Cash Flow is always speculative dependent on the amount of down payment you put down in my personal opinion.  

But very helpful insights on the particular locations, thank you Brandon