All Forum Posts by: Ryan Howell

Anytime I'm about to make a purchase with the intent to BRRRR, I sit down with my lender who I plan to refinance with so that I understand if I will be able to refi or have any issues. That would be my recommendation. The reserve requirements can change I believe and they may be able to count retirement funds (I'm not a loan officer) which is why talking to your lender is your best bet.

@Maurice Blackledge - I generally assume closer to 5% for repairs instead of 2%. I think it is a reasonable deal and you will learn a lot and gain valuable experience, but I wouldn't say its a home run. Have you thought about having another investor or agent in your area help verify the ARV? If you were conservative and it comes in higher, it would make the deal a lot better.

@Nicholas LaGatta - Personally, I would want to have some equity or at least not be upside down.  How does your overall equity on your portfolio look?  Run some scenerios - if rents drop X% what is your cash flow?  If the market drops X% what can you sell?  Does buying this property improve your overall risk on your portfolio or hurt it? 

I would want to know what the other debt is before I made that decision.  If it is consumer debt, personally I suggest to avoid investing in real estate until you eliminate consumer debt and change the habits that cause the problem as those habits will undermine any wealth building real estate can offer you.  If the debt is student loans, I'd probably pay that off prior to keeping/buying more real estate.  If the debt is a low interest mortgage then I would have to assess the property and its location/equity/cash flow and other opportunity costs.

My philosophy is to avoid any debt unless I'm financing an asset such as real estate, especially if it is high interest rate.

I assess my risk based on cash flow, reserves and equity. Equity is inherent with a good BRRRR deal since you need equity in order to get your money back. Cash flow is one of my requirements up front before I move forward....Reserves are generally your limitation. I'm personally slowing down right now because I want to ensure I have more reserves before going much further for exactly what you're talking about. I will say though the more properties you have the more you are "smoothing" out your monthly cash flow, so having big expenses is in some ways less impactful.

I would join a local REIA. Ours has a handful of agents that are investors or work closely with investors. It will be a good way to meet an agent. The agent as well as other local investors can advice you on good mortgage lenders.

@Antonio Cucciniello's advice is spot on.  You should do your research and know your market, but don't think that the fear is going to subside when you're ready to buy.  You will never be 100% comfortable because it is still a new experience.  If you wait for that feeling of comfort you will get stuck in analysis paralysis and never move forward.  

I would do a cash out refi.  As far as your husband goes, I wouldn't add him unless you need to in order to qualify since you have limits on the number of loans your allowed in your name (potential to qualify for additional loans later).

We bought 3 more units in Hendersonville.

I'm considering adding an addition with a garage apartment.  It will help me to add square footage to my house, give me cash flow, and if I decide I don't want tenants one day or after its paid off, I can repurpose it for our use to enjoy as a game room, etc.