All Forum Posts by: Perry Ivy

Eric Munson it sounds like your comfortable with your strategy as I am with mine. I prefer to keep my cash in my properties and make more cash to put in via flips and new construction. Like I stated I don't have trouble getting financing and don't mind moving slower than the next guy. I've been to the courthouse many times and watched people's investment get auctioned off. Cheers

Chris T. I'm not sure what you mean by cash position, if you mean storing cash for purchases, no. I am aggressively paying down debt and yet buying properties. The deals I make, I would make in a down economy. Let me ask you a question. If you were a banker and a guy came in that did the brrr strategy and he had borrowed 85% of all his properties value. Then you had another guy to come on that only borrowed 50% of his properties value, who would you trust more and be willing to work with? I just purchased a house for 60k, put close to 30k in it and expect the appraisal to come back around 130-140k. I don't have trouble getting loans and don't need the brrr strategy, the no money down, or the hard money loan. There again that's my strategy and to each their own.

Chris T. Thanks for giving me a chance to vocalize my opinion :) I'm willing to assume some risk, so I do acquire additional properties before paying one off. Most people do the brrrr strategy because they need funds and can't get it any other way, if my banker is hesitant about loaning me money, then wouldn't I be wise to take a money to examine why? I don't have a problem getting bank financing, but I have had a banker to ask me to do something before buying additional property. I initially was upset, but she was right and I wasn't seeing things clearly. Concerning the market correction: I don't have that looking glass, but I believe it's close. I purchased a house this year for 49k, put about 30k in it and it sold for 122k. This was in a b/c neighborhood and the surrounding houses were about 60-90k properties. Why is that strange? It's because I was going to hold it, but was pestered into selling. In my opinion the bank shouldn't have made this loan as it was way overpriced. I sold one in the hood for 65k this year, I had purchased it for 27k. Everyone is investing in real estate these days and very few have a clue about what their doing. Corporations blindly buying properties. I believe we're really close, so be prepared. Thanks again

Chris T. During the last downturn I was a buy and hold guy, I bought distressed, repaired them myself and work hard to pay them off. Although I was affected some, I had zero stress about the downturn. Now my strategy is similar, but has had some changes. I'm still a buy and hold, but I do an occasional flip and I also build and develop. I sub it all out now and I still work hard to pay off the debt that I incur. I roll my profit from the flips and new construction into my rentals.

Jayson Edwards I see several problems with this method: most people that use this method are desperate for cash and desperation will set you up for a world of trouble. I also see it as kicking the can down the road, your leveraging as much as you can with the hope of having enough cash flow to outrun impending problems. Warren buffet has a saying that goes something like this, "you can tell who's been skinny dipping, once the tide goes out". The brrr strategy seems great as you get more properties and activity, however your payment then goes up and insurance increases along with your risk. Imagine this: it's 08 and you've been successfully using this strategy and then suddenly the market collapses. What will you do when your properties are over leveraged, your tenants lose their jobs, or can't afford to pay as much rent and then you get that call that informs you that your roofs leaking, your hvac is out, etc... this happened to me and thankfully I wasn't using the brrr method. I dropped the rent, used my savings for repair and shopped for bargains. Dozens of "more intelligent that I", investors in my community list everything, including the second wealthiest man in town. If you don't think a market correction is coming, then may God have mercy on your finances. No judgment here, just answering your question. :)

Jerry W. wow! I have never heard of that strategy and I thank you for sharing. I have my properties in an s corp for protection, but I can see the value in what your doing. I believe it wise to eliminate personal debt, like what you have done. I've tried to live my life debt free and that's why I asked the initial question, as debt has taken me past my comfort zone. Thanks again for sharing!

Yes, substantially so. I am not an advocate of this "strategy" and would advise against it.

Karla N. yes that's my brother :)

Karla N. hello from Jonesboro, it's a great place to build a real estate business. You appear to be doing well! Congrats!

Ryan Garoogian thanks for sharing and thanks for making me feel better ha