All Forum Posts by: Jake Baker

@Austin Ralls

Yes, when you refinance out more than what you owe on the previous loan and enough to cover your holding costs, that is a "perfect brrrr". Not as common in this market but always great to get those. 

Here are a few nuances to be aware of with the BRRRR method:

1. Most conventional loans have a seasoning period of 6 months. 

2. If you refinance into a DSCR loan, there will be 1 2 or a 3 year prepayment penalty. Make sure these play into your goals.

3. Shop a few lenders to see what kind of loan products they offer. Some offer different products. 

Happy investing! 

@Mike Boss

It is best to underwrite conservatively with the ARV. For the appraisal at the end, the best you can do is have an agent pull comps for the property to give to the appraiser. A lot of appraisers appreciate this.

I can tell (give or take $5k) how much a rehab will cost. When I go into contract on a property, I actually have my contractor and inspector walk the property before wiring the EMD. This can save you a lot of money if you find something like a foundation issue in that inspection.

Happy Investing!

@Alexandra Berman

Most conventional financing requires the property to be insurable (livable). There are also seasoning periods to consider. i.e. you cant refinance for 6 months or else you pay a prepayment penalty. 

We finance initially with Hard Money. They will typically fund 90% of the purchase price and 100 percent of the rehab costs on a draw schedule. By draw schedule I mean you complete the first 1/3 of the rehab, then they reimburse you for that completion, and repeat for the next two faces of the rehab. So essentially you will need money for ten percent of the purchase price, the first portion of the rehab, and holding costs to pay the hard money payments monthly and taxes/insurance. 

We will typically refinance into a DSCR loan.

Happy Investing!

@Andrina Maximin

I started with a property that needed a light cosmetic rehab. This allowed me to build a team and not get too in over my head with a complex rehab. 

DSCR loans are not mutually exclusive to the BRRRR strategy. You can finance a turnkey rental with a DSCR loan.

We flip 10-20 houses per year in Jacksonville FL. Here is what I suggest.

1. I use dealcheck to underwrite my deals. I find their comp-ing tool and offer calculator very useful and they have a mobile app that is user friendly. Once you start running bids, you will get an idea of how much things cost.

2. I use ClickUp for task management. I create templates for each phase of the flip. 

3. I get most of my deals by networking with agents. The next best ROI are SMS campaigns but regulations are always changing and may kill SMS in the future. Cold calling is great and bulletproof with regulations. I personally have never found an efficient ROI with direct mail but there are point that do it.

4. Read a couple of biggerpockets books, go to meetups and meet other flippers, and learn form experience. No courses needed. 

Happy Investing!

@Jimmy Kang

A good way to meet investors is by attending local meetups. Check them out here or on meetup.com

@Hyeseong Park

I agree with @Liam Naughton that a house hack is a great option. My first house hack catapulted me into real estate. Buy a new house hack every few years, and continue to rent out the previous one. 

I have flipped countless houses but my few house hacks have made an instance return compared to the effort that I put into them. 

Happy investing!

@Tim Dyer

My company does 15-20 flips/brrrs per year in Jacksonville FL. Like @Matthew Crivelli said, we use DSCR loans to refinance our BRRRRs.

We use Hard money for most of the funding of the purchase price and rehab. We raise money from investors to cover the difference and holding costs. While we give up equity by doing this, this allows us to do as many projects as our deal flow allows us. 

Hi @Jack Elliot

I agree with @Nate Meeker that house hacking is a great option. You will get better financing that way as well. 

Even if you were to move back to LA, you can continue to invest in Missouri out of state. Network and build a team in Missouri before you move back. 

@Richard Mercado Thank you for sharing your numbers and lessons learned. I have been through similar situations as well. 

When I go into contract on a flip, I will have my inspector and contractor in there on day 2. It is better to lose the cost of an inspection and your contractors time then to enter a bad or not so good deal.