Thoughts on live in BRRRR?

Question

I've wracking my brain trying to figure out a method of entry into real estate investment even though I can't afford it.

My credit score is good and don't really have any debt but I make very little money and there is no easy out in my particular situation.

I tried asking family members to do a joint investment deal with me, even offering to pay all of the mortgage expenses but I am not so lucky.

I can afford to pay a mortgage up to maybe $400 a month before it starts becoming too much of a burden. Yes, I am that poor but I don't wish to get into the specifics of my situation.

In any case, I feel comfortable with a mortgage up to $40k probably but lower is better and I just don't have the resources to do a complete BRRRR unless it's a steal.

I'm thinking maybe I can purchase a house using FHA and "flip" it at a pace I can afford and then reinvest to spark the snowball.

Any thoughts on this plan? Any thoughts on what sort of house I should look for and how to find it?

Colin C leamy · Answer

I'm already living as cheap as is practical in my situation. My hands are tied, there's nothing more I can do. For now I need to focus on what I can do within my current means.

David Fernandez · Answer

Hi @Colin C leamy,

Aside from pursuing a del using some creative finance and/or hard money, if you want to buy real estate  using traditional loan products, I will recommend you to improve your personal financial situation first.

Reduce expenses as much as you can and still live a comfortable life (where do you live now? Can you rent a 2BR apartment and get a roommate to share your housing expenses?)

Then try to increase your income (new job, side hustler, etc.).

Once you reduce your expenses and increase your income, you’ll be in a better (and less riskier) position to buy real estate. You’ll have savings for your down payment, you can qualify for a better mortgage, and you can use some reserves, in case you need to replace a big ticket item sooner than expected.

Good luck!