All Forum Posts by: Nicholas L.

@Ryan Daniels correct, not a deal.  Good analysis though

@Dominick Galinis two major reasons, actually:

1 - the best properties to BRRRR may not be eligible for conventional financing due to their condition. So if you find something that a bank is willing to lend on, it will likely be tougher to boost the ARV enough to make it a true BRRRR.

2 - if you finance up front AND refi, you pay financing / closing costs twice.  This makes it more expensive.

When you BRRRR, you really need to add up all your costs - not just purchase and rehab but also financing, closing, holding, leasing, etc. These are often overlooked, and can be substantial when you add them all up.

@Dominick Galinis specific but narrow point - it's much more difficult to BRRRR if you use conventional financing and put 20% down on the purchase.

@Alana George congrats.  I am assuming this was your first investment?

@Yuehao Wong there's nothing wrong with rent hacking.  Keep working, keep saving, keep learning and try to get a W2.

@Ryan Worley you're not missing anything.  These are very, very general rules of thumb, and all they are meant to do is narrow a large number of properties down quickly.  You then move to a more detailed analysis.

Say you have 100 properties you're analyzing and you use the 1% 'rule' on them.  It leaves you with 17 properties.  Next, discard the rule and use more detailed estimates (which it sounds like you're doing).  Say that leaves you with 5.  Of those 5... you can then go even further.  Make sure the taxes are exact.  Find out who pays which utilities (landlord or tenant), etc.

Make sense?  It's just a screening rule of thumb meant to narrow a big list down to a smaller list.  It doesn't tell you whether 123 Main St. is a good deal or not.

@Kayla Johnson do you have your own cash?  How would you finance the purchase and rehab?  Have you considered house hacking something that needs less work?

@Steve Tim I like the answers of @Jeremy Jackson

I'll add this on 3... that's where you rely on your team.  Your agent, your property manager, your contractor, etc.  But there are tons of threads on BP on each of those topics.  The toughest part for you is going to be finding the deal.

@Steve Tim what are your specific questions?  I'll ask you a few:

Are you connected with any realtors who work in those areas?  Do you have funds for a down payment?  Do you have cash reserves in addition to your down payment funds?  Do you own a primary already, or do you rent?  Are you working with a lender?

@Benjamin Perles are you working with a realtor or a lender?  Both are free.  Read up on house hacking.