All Forum Posts by: Nicholas L.

@Bryan Kelly yes - for example, your buy box is probably limited by the capital you have access to, the geographic area you want to invest in, the type of investing you want to do, etc.

@Jennifer Sovia I don't know anything about the Raleigh market, but it's generally tough to BRRRR right now, especially with low capital. BRRRRing is expensive, and the transaction and holding costs often get glossed over on BP.  You really have to find a killer deal for it to work, and there is cash to shell out at each stage - closing costs, potential down payment, holding costs, insurance, rehab, and then more closing costs at the refi.  It just cannot be done without cash.

So - I agree with the others who have mentioned house hacking as a better way to get started.  Or... RENT!  Renting is a great deal in the short term.  No closing costs, no rushing into a bad deal.  Get to know the market, network, build contacts, look at dozens or hundreds of properties.  Then buy.  =-)

@Jeffrey Barrows

no, it's not too late.  but, food for thought - cash flow has been compressed because of where the market is.  so, i'm not sure what you were contemplating, but if you just go buy a solid, on-market deal that doesn't need a lot of work and put it under property management (as you should!), you'll probably net at most a few hundred dollars a month.

is that what you want?  if so - great.  but this doesn't have to be your only option.

before you jump in i'd go to REIA meetings, network, and go look at as many properties as you can. don't buy a deal just because you just found BP and feel like you're missing out.

@Danny Lambert

a few things

yes, what you offer matters.  and there's no way to know in advance whether 10k is going to make or break a deal until you have a specific deal.  it might depending on all the numbers.

also, not sure if you've been looking yet, but it's extremely unlikely in today's market that you are going to find a house on the MLS listed for 100k that needs 50k to be worth 200k. those types of deals are usually found off market.

finally, be sure to include all costs in any eval you do.  a lot of the transaction costs get overlooked on BP and they are non-trivial.  a live-in flip is a great way to reduce risk but if you buy with financing and then refi that is still two sets of closing costs, probably with lots of delicious fees for the lenders.  include these costs in your analysis!

hope this helps

@Sean Fraser yes - ask an agent.

@Jeff S.

I'm not sure if this is narrow enough to constitute a "topic," but it frustrates me when beginners are told to start with some of the the toughest strategies!

like - flip houses to generate capital!  lend your life savings out to random local flippers!  invest in profitable syndications! 

this seems to me to be terrible advice... beginners have no business doing any of these things.  they should house hack or buy 1 rental and make sure they want to be landlord.  HNWIs can do anything they want - become a private lender or put it all in crypto.  but not beginners!

does this count? =)

@Bob Stevens shouldn't beginner buyers work with agents?  Not necessarily to find deals, but to transact.  You're saying you're an expert and no longer need to - that's great.  But IMHO, OOS beginners should start out working with an agent...

@Angela Orecchio I'm not saying BRRRR doesn't work right now, I'm just saying that's it's difficult. I'm still glad I did my deal - I just needed the funds to cover the shortfall in the appraisal, which I had. I'm looking for my next one and hoping to improve! So that was my point - using partner money to do your first one seems risky to me because you'll be liable to your partners whether it goes well or not.

@Ryan Beckham yes:

-Save up some money

-Go to REIA meetings and network

-Call lenders

@Gina Shumway OK. No offense intended... but I think it's pretty difficult to BRRRR right now. You really need everything to break your way - you have to find a great deal, you have to have contractors ready to go, materials prices are up and it's taking longer to get everything, and then you have to refi with the higher rates that are available. I just finished one myself and I got everything right except for the appraisal - it was low and so I "left money in the deal." And I was able to refi at 6.5% which I don't think is available anymore.

So, I get nervous when people who have never done a BRRRR before are using tons of leverage, which it sounds like you are.

Just my two cents.