All Forum Posts by: Jake Baker

@Samantha Storz

Philly is a great place to invest. Some nuances to consider with the BRRRR methods:

Financing - be sure you talk to lenders about the refinance process before you purchase a property.

Rehab Costs - it is easy to go over budget. Expect overrun here

Permit - Understand permit timelines

Appreciation - don't rely on appreciation

ARV - Analyze your ARV conservatively

@James John Losinski

1. Define your Buy Box - You need to move quick on good deals. 

2. Be conservative on rehab numbers and ARV - these tend to be the biggest variables.

3. Location Location Location - We buy rentals in great areas that we believe will have growth. 

@Leon Lee

Tangent - I used to have cable with internet at my Airbnbs. Now I just have internet with a Roku TV so guests can sign into their accounts. This keeps things much more simple. Before I was getting messages from most guests on how to work the cable no matter how detailed my instructions were lol

@Justin Pickering

This is a great deal. Congrats! 

What kind of renovation loan was this? Hard money lender?

@Pejmahn Choupani

I agree that value add through BRRRR is a fast way to scale. We do 20 flips/brrrrs per year and it is a long of work.

My advice would be to do whatever helps you buy real estate faster and get you to your passive income goal . i.e. Some people don't have the time right now to start a BRRRR business. If you have a really high paying job, focus on that and saving money for down payments. Or do hybrid approach.. find a partner that can run the rehabs.

@Shyheim Lee

Conventional banks will not want to be in second position for their loan. You will need to find a private money lender that is willing to be in a second position. Even still, that will usually require a higher interest rate. 

DSCR loans are the most common investment loan. In short... If you use a product like this, it will be required that you cash flow. There are ways around this with higher rates or more points down. Overall, you should always allocate reserves to account for vacancy and CapEx.

@Ivan Rivas

OPM - Other People's Money

We do 20 Flips/BRRRRs per year and we fund with a combination of Hard Money and Private Money.

Hard Money will fund 90% of the purchase price and 100% of the rehab on a draw schedule. 

Our Private investors will fund the remaining 10% of the purchase price, the first portion of the rehab (to be drawn later from the HML), and the holding costs. Of course, with private lenders, you will need to give up equity or a return on the debt.

As @Dan M. mentioned, credit cards with 0% APR are great but be responsible with this. I use the Chase Business Ink Unlimited.

@Gabe Callaway

I tried to do a cash-out refinance on a duplex recently with DSCR. There seem to be more strict rules around the DSCR ratio and LTV compared to single families. However, this was 6 months ago and things may have changed. Something to watch out for.

@Davinder Chand 

There are plenty of great lenders on BP. BE sure to get multiple quotes from brokers as they may have access to different lenders. 

You will likely want a DSCR loan - Debt Service Coverage Ratio

Many lenders will allow you to go to 80LTV if the property cash flows enough where it doesn't go below a 1.0 DSCR. Some lenders allow for 0.9 DSCR for a higher rate or more points down. The current rates do make it difficult to stay within that ratio.

@Alexandra Arnhold

Definitely time for a CPA. @Account Closed is a great option for you. As you build more of a portfolio, you should consider hiring a real estate focused bookkeeper if accounting isn't your thing.