All Forum Posts by: Young Park

@Gabe Sasser 

That all depends on how you want to proceed. First of all, we should always have contingency set aside for rehabs because something unexpected will happen. You can negotiate with your contractor as well. 

Now, if you "only" pulled out 85-90% of your money (leaving 10-15% in the deal), is it considered a failed BRRRR? I would argue that it's still better than a turnkey knowing what rehabs were done and you can expect to defer capx further down the road. EVEN IF you leave 20-25% of the money, you just made it a turnkey product and lessons learned.

For on-market deals, I usually select the option to have the inspection period but the seller won't make any repairs (option 2). You can still negotiate. If it was a non-refundable EMD (often off-market), then you need to make that decision. Is it worth pursuing the deal? Or is it better off to walk away from it? Either way, you'll probably be better at evaluating properties afterward. We all have our own risk tolerance and how we view the price/value of the property.

Sorry it's not a clear answer that you may be looking for, but TLDR answer would be - it all depends. Good luck!

@Allen Zhu If I'm understanding you correctly, are you saying if BRRRR can be done putting down a 25%, rehab, rent, then refinance? If so, then theoretically yes. But you'll be paying for the closing fees twice and won't have the "leverage" of using the quick cash closing to purchase the property at a lower amount.

@Robby Williams Gotcha. So is it free & clear? Is it under your name? You can potentially do a cashout refinance and cash them out. If it's a good property and if you can still cash flow, it's worth consideration. Best of luck!

@Robby Williams I'm a BRRRR investor but if you have the option to house hack (and if your wife is on board), then I'd probably suggest house hacking. But do you have to sell your current primary residence? Would it cash flow if you were to place a tenant in it?

@Michael Higgins This one is just above breaking even after considering PM, vacancy, capx/repairs. Recently renewed the lease with a whopping $25 increase so THAT much more haha. They're good tenants so I'll slowly raise the rent until they decide to leave. I should be able to increase by a minimum $100-150/mo when closer to summertime.

Hi @Srikanth Raj! I live in Hawaii and started getting interested in out of state properties due to the cost of real estate here on the islands. I read the long distance real estate investing and the BRRRR book by David Greene to learn more. I learned a lot from reading books, listening to podcasts, and watching videos, but it still was very difficult to get started.

I'm conservative (and logical) so for me, the best way was to find a mentor who already has an established relationship in a specific market. For me, it happened to be the Kansas City market. I was able to learn the process through action steps and able to leverage the relationships (PM, lender, contractor, etc) to complete my first BRRRR and currently on my third BRRRR. If you have any questions, please feel free to reach out :)

hi @Chris Tyree. 

I think both strategies work, but what's your goal? 

If you're thinking buy & hold (which is what I do using the BRRRR strategy) and cash-flowing after PITI, capX, vacancy, PM, then you'll be ok even if the property value decreases. Your tenants will be paying down the mortgage payment regardless of the property value at the time. For me, the recent increase in home values helped me out by increasing equity (HELOC) in the property. If the values were to decrease, I still owe the same mortgage payment for the next 20+ years which the tenants will pay down.

@Tyrese George I don't think the configuration is that big of a deal but it may be a consideration depending on your market. If a 3/2 is significantly worth significantly more, or rent significantly more, then may be worth getting that over a 2/1 or a 3/1. At the end of the day, if the numbers make sense, then go for it!

If it's going to cash flow at that said price, you may want to consider a cash-out refi or get a HELOC to leverage it onto the next property. There are HELOCs available for investment properties out there.

@William Harris Hey William! Sounds like you got good problems, my man haha. I honestly think you'll get different answers from different people because we all have our own opinions. 

The real question is - what is important to YOU? What's your current situation (financial, life, etc)? What's your long-term goal? Does one option align with that goal over the others? 

Best of luck!