All Forum Posts by: Ryan Tongue

If you are cash heavy, you want to use that to your advantage. Most ppl have to fish in the MLS/over priced wholesale pond. They have only 50k and they need the most financing leverage they can get. So they are stuck in a very small pond with a million rods in it. Getting the BRRRR to work from this pond is nearly impossible, and as you've experienced buying turnkey makes you question the cash flow over the liquidity.

There is another pond, but it's dangerous.  Your moving cash around, sometimes without 100% vetting, but purchases will be under market.  I'm talking auctions, foreclosures, short-sales, direct from sellers in dire need.  This is the pond that the players fish in.  Cash deals.  Quick closes.  Money being sunk into undervalued RE.  The barrier to entry is the knowledge.  Someone needs to know the market street by street.  I mean school districts, parking, downtown, where the parks are, the restaurants and shops, colleges, even the good sections of the bad zip codes.  Your end goal is to pick up an asset for 50% - 75% of it's current as-is value.  Once the deed is in your name, you do a full inspection of the property to understand which of the 4 exits you plan on doing:

1) You don't lift a finger and add 20% - 25% markup and sell it to another investor who will take it all the way. You make an outstanding APR on a 3 - 5 month capital investment.

2) You decide to to a very light rehab, freshen it up, patch up any glaring issues, and you list it on the MLS for someone to buy as a cash flowing rental. Your return on cash will be 25% - 50% in 6 months, nearly a 100% APR. If it doesn't sell you can refi out FOR JUST YOUR MONEY BACK, nothing extra and keep it as a cash flowing asset you have nothing into.

3) You wanna flip it, so you can take the property to a lender who will put you in a delayed purchase Bridge loan and they will give you 80% - 90% of the purchase back, plus supply you with the rehab money to fix the house. You gain your liquidity back, but you'll carry the note for 6 - 8 months probably, but the return here can be substantial b/c you were in under market to begin with. This is the "going for it step". If you go for it, the conditions need to be right. That means mortgage rates need to be on a descending trend, the market the house is in has to be active, and the asset itself needs to be in a good school district and have a driveway and not be too far from downtown. A lot of the intangibles have to make sense. But when this step is pulled off from the bottom rung, the payday is huge. Last year, my partner in Pittsburgh bought a house at auction for 35k. He sold it untouched to an investor for 120k. Incredible school district, but no parking. So my partner opted for making a quick 85k and call it a day, but the buyer's lender did an appraisal and the ARV was 330k, but it needed 110k in work. So a 145k project cost with an ARV of 330k. You can't kiss that net. You can give it away at 250k and still do very well. These are the situations you will find yourself in buying this way. 44% project cost. The investors in that crowded pound are tickled pink if they snag a 75% project.

4) You know you want to keep this in your portfolio from get go, you go to the lender and do step 3 but instead of sell you do a DSCR refi but only take your money back. So in example above you would find a renter for like 2700 - 3000 per month, shouldn't be hard in that school district. You go to your Lender and you do a 45% leverage DSCR, which should have a great rate to it. Your monthly would be 1100 - 1300, maybe. You're in for 0 and collecting 1500/month. Now just add 9 more!

I have a friend that raises money privately for the down payment and then executes an out-of-state BRRRR strategy. Would be happy to make an introduction. Just email me.

@Ryan Tongue,

Hey Ryan! First off, massive props to you. Buying three duplexes at 23 while in college is no small feat. You already have more experience and equity under your belt than most do in their 30s, so you’re on the right path.

That said, I completely understand where you’re coming from. Putting down 20% on multiple properties just to net a few hundred a month can feel like slow progress, especially when you’re hungry to scale. The good news is: you’ve built a strong foundation, and now it’s about using strategy to unlock that next level.

Here are a few solid directions you could take:
1. BRRRR Strategy (Buy, Rehab, Rent, Refinance, Repeat)
You're thinking in the right direction — BRRRR is a great way to recycle capital.

You don't necessarily need all-cash to BRRRR. Consider hard money loans or private lenders to fund the purchase and rehab. After stabilization, refinance into a long-term DSCR or conventional loan. Just be cautious of today's higher interest rates and tighter refinance requirements — you need to buy deep enough to make it work.

2. Small Apartment Complex (5+ Units)
Going bigger can actually be easier to scale, especially if you're bringing in outside investors. Bigger properties are valued based on net operating income (NOI), meaning there's more room to force appreciation and exit with a refinance or sale. Syndication or joint ventures could work here, especially if you're comfortable raising capital.

3. Value-Add or Light Flip Deals
If you're looking to build up capital quickly, a light rehab flip could work, especially in your local market or a market you know well. Even just doing live-in flips (if you're open to it) or combining with a house hack could free up equity and reduce living costs while building momentum.

4. Partnering Smart
You mentioned potentially raising $500K- that's a huge advantage. Just make sure you structure it with clarity: are they passive investors? Equity partners? Debt lenders? Outline roles, returns, and exit strategies.

Final Thoughts:
You’re 100% right -- saving up $50K per deal just to cash flow a few hundred/month isn’t scalable long term. The next phase is all about velocity of capital — how to use it, recycle it, and grow it. Whether it’s BRRRRs, small multis, or flips, the key is to find deals where your capital doesn’t sit stagnant.

Keep doing what you’re doing, but add strategy to experience, and you’ll be well on your way.

Happy to connect if you ever want to bounce off deal ideas!

Best,

Melissa

@Ryan TongueThis is a common position investors face when getting into real estate, as far as what direction they should go and how to scale their portfolio.

At its core, scaleability is a factor of the equity and cash you can get your hands on. You have actually scaled much more quickly than most because of the partner. A first option then would be to find another partner.

The second option would be to cash out refi those properties to access some of that equity. The problem with that is that a refi will almost never improve the performance of a so-so property. Make sure you understand what the impact of a refi will be on your current property's performance.

With that being said, a third option would be to sell and use a 1031 exchange. A 1031 exchange allows you to sell investment property and buy investment property/properties using all of the tax and depreciation that you would normally pay, and instead, you get to use it to purchase your next investment property. Plus you use all of the equity (not some of it) in your next purchases. There's an added bonus that you could separate from your partner if desired. And if you want to get into value add projects then boot strap and swing a hammer yourself :)

Investors will often use a 1031 exchange in their BRRRR strategy to take advantage of those tax dollars, making it easier to scale their portfolio and continue that process until they decide to retire completely passive.

To boil it down a bit, you want to determine what kind of investor you are. For example, how passive or hands-on would you like to be, or are you looking for mostly cash flow or appreciation? And don't forget that low cash flow is not the indicator that you have made a bad investment. You might have low interest loans that are returning your capital faster. And appreciation is still happening as well.

Keep in mind that the goal isn't to see how many properties you can own. The goal is to make money. It's usually better to own fewer but nicer  properties that will appreciate over time rather than buy cheaper properties and hope to cashflow a few hundred a month with poor appreciation. Best of luck to you.

@Ryan Tongue While there’s lots of opportunities in real estate/commercial real estate I’d sit down and brainstorm with a list of the pros and cons of immediately jumping into the real estate industry as opposed to pursuing a job with your engineering degree.

If you want to build up a portfolio quickly the income you can get with an engineering job might be a great starting out point with W-2 income for more down payments and purchases.

There’s also probably real estate careers where you could use some of your background. Surveying comes to mind, or development where you’d have use of your knowledge of mechanics and plans and such.

I’m not well versed in engineering but would think if you try hard you could combine the two and make yourself a niche market that you’re uniquely suited for and could benefit you financially.

If you are interested in sales and commercial deals I would see about getting licensed. You can build a great business cold calling and targeting commercial deals. Could be apartments, warehouses, strip malls, etc. If there is a dynamite brokerage that specializes in commercial I would see if you can intern or join. 

@Ryan Tongue -This is great, congratulations. I am only a few weeks into my journey so your original post really hits home and to see what someone who is really driven to accomplish a goal can get done in 9 months is inspiring. I would love to hear more about how your first deal went. Specifically, more on your partnership and the roles played, the funding (saw in your original post you were exploring options), and how you are managing the properties.