All Forum Posts by: Hayden Breckenridge

@Peter Tverdov This is very interesting! Thanks for sharing. I have a follow-up question. Now that interest rates are going up rapidly (~5-6% at the time of this post), would it be even more appealing to use a HELOC if I can keep my 3.1% fixed 30-year mortgage and plan to hold the property for the long term? In the past couple of years, it made since for us to cash-out refinance (i.e. the traditional BRRRR method) because the interest rates kept declining. At that time, we were able to get our cash out and refinance at even lower rate.This has me thinking that it might be time for us to change our strategy and utilize the HELOC in this scenario. Anything that I am missing or any advice? Thanks!

Hi @Fiza Ah. We are in the middle of competing another BRRRR in the mountains of NC. We purchased that property in July of 2021 and we have since completed our renovations and the house has appreciated significantly. We are house hacking by living in the downstairs unit and renting the top unit on AirBnB. It is frequently booked and we are living mortgage free. Now we are trying navigate how we should pull money out of this property to move on to the next deal. You bring up a great point about the higher interest rates, so now we are debating whether we cash out refinance like we have done before (i.e. property referenced in this post/ traditional BRRRR) or should we get a HELOC? My thoughts for considering the HELOC over cash-out refi, would be that we get to keep the lower interest rate that we had when we purchased the property back in July of 2021 (~3%). I would love to hear from anyone else who is going through a similar dilemma and what they would propose would be the strategy for pulling money out. What are some cons to using a HELOC?

@Greg Pawluk Thank you. I was certainly surprised that there was enough demand for STR in Garner. Most of our guests are coming to visit family (i.e. holidays, weddings, etc.) in Raleigh/Garner. Feel free to send me a direct message if you would like to grab coffee or beer sometime.

@Myka Artis Thanks, and I agree with you. There is so much upside to BRRRing and then converting them to STRs.  

@Luke Trovinger Thank you! We currently have two listings in Garner, NC that we manage ourselves on AirBnB: this property (an entire house listing) and we house hack our primary residence (private room(s) listing).

@Joseph Bafia thank you and I just sent you a private message. @Dmitriy Fomichenko Thank you!

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $177,500
Cash invested: $75,000

Single family residence (3BR,2BA) that was renovated and fully furnished in Garner, NC (a suburb of Raleigh, NC). The property is used as a STR (i.e. AirBnB).

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

The ability to force appreciation by doing some renovations in the kitchen, bathrooms, and living area.

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

Found the property on MLS. Property had been under contract recently and the sellers were motivated.

How did you finance this deal?

Conventional mortgage loan. Cash-out refinanced approximately 8 months after purchasing the property.

How did you add value to the deal?

Open concept, new flooring (LVP), new paint, new finishes, redesigned the kitchen, upgraded HVAC, and curb appeal.

What was the outcome?

We now have a beautiful property that has performed well on AirBnB (~$1000 in cash flow).

Lessons learned? Challenges?

Gave us confidence. Review the financing terms carefully and think long term (i.e. how fast can you refinance).

Thanks for posting. My wife and I are also looking for a BP meet up in the same area (South Raleigh). We will be following this thread to see what is currently available.

Hi Jason,

Glad to see you are looking to invest in the Garner area, so welcome! My wife and I started investing in the area about 3 years ago and it has been very strong for us. That being said, I would also echo what Jiri B. has mentioned in his post. The numbers you mention here sound pretty tight and you may experience negative cashflow in the beginning. Appreciation is typically low for townhomes and HOAs are not ideal for trying to maximize your cash flow.  

My wife and I typically stay away from new construction/townhomes and look for single family properties that need just a little “TLC”. Although it can seem overwhelming at first, you realize quickly that you make your money when you buy, so finding something below market value is key. Plus it helps that we have met some fantastic contractors who assist us with any and all of the renovations we do. Typically, we find contractors via word of mouth. Of course, all of that is easier said than done but if you constantly keep an eye out, opportunities always seem to come up. 

To give you an example, about 6 months ago we closed on and renovated a 3Bd/2Ba ranch single family property with ~$70K cash into the deal. We now have strong cash flow and because we forced appreciation onto the property, we are going to be able to cash out refinance it this month and have almost enough for another deal. There are great opportunities in Garner, you just have to really check the numbers and be conservative.

Best of luck! Feel free to reach out if you have any questions about Garner or REI.

Hayden B.