Trying to grow portfolio (BRRRR), but in today's market...

[William S.]

I'm currently in my growth phase of my portfolio. However, I do not see any value in today's market. I started a year ago and have 4 units (3 SFH, Duplex House Hack). In today's market I am considering selling two of my SFH rentals that are low performers and using the cash to refinance out of my FHA loan for the duplex. Since I started, my education/team have progressed and I have narrowed my strategy down. My next steps are completing BRRRRs in my target area, but the numbers do not work like they did two years ago. Prices have gone up 20%, but rent only 10% or so. The value is simply not there. Example Below:

Purchase Price = $105k

ARV = $160-170k

Rehab = $35k

Rent = $1,450-$1,650 depending on size

In this scenario it would take some out of pocket cash, and there wouldn't be much cash flow per month...

I'm unsure where to go from here. I want to grow to five SFH rentals using BRRRR, then snowball the debt, but in today's market I'm not sure if this strategy works anymore.

Thoughts?

[Brian H.]

As others on here have already pointed out, don't fall for the over the top success stories you hear on the podcasts. Not saying they aren't real, but they are SO far from normal. These are people who had financial help getting into this perhaps, or they forming at exactly the right time in the market crash. This is the reason I have not spent much time on the BP podcast. The majority of the stories and advice just do not apply to probably 90% of us.  They are talking about million dollar deals and stuff like that. Not realistic. 

Also, you have landed four properties in just one year and have them all rented? Dude, breathe. You are doing fine. Don't fall for the get rich quick ideas thrown around on here and in the podcast. Sure, it happens. But man, it's more commonly a slow growth. That's ok! I'm not talking creeping slow, but not explosively fast like we all keep hearing. 

You can find a lot of more realistic stories here in the forums and some very great advice.  Hop over to the landlording subforum. Ask questions, read. 

You have done great for your first year. Don't get too worked up if you are making money!