IS BRRRR necessary in this situation

[Jordan Jackson]

Details:

I have solid w2 income, good credit, cash on hand, a local lendor willing to do mortgages down as low as $30k (after 20% down), and a family handy man to handle most repairs and rehab work. In a hypothetical, properties in our area can be had for $25-$50k, fixed up for ~ $5k, and rent out for $800-$1000/month. I only have 2 mortgages in my name so could do a couple of these, and my wife has a good w2 job so theoretically have a long run way before i run out of traditional financing. I'm not looking to do 30 of these my first year, and have the cash to support a more modest 5 or so in next 12 months, so, my question is BRRRR even necessary for me at this point in my journey?

I get the appeal of BRRRR for those who lack cash or want to scale faster, but to me it seems like I am introducing unnecessary variable/interest expense in taking out some kind of high interest LOC (sofi offered unsecured $100k at 9% or my bank will do secured $50k at 7%).

Interested in any perspective, thank you. 

[Haven M.]

I would think BRRR is even more appealing in your situation. I'm not sure why you would need the high interest LOC if you have the cash to support 5 in the next 12 months.

If you have the cash to cover one on your own, purchase with cash, rehab, get it rented and then finance it at 80% with your local lender. If you buy it right, you can likely get all your cash out immediately and have an ROI through the roof.

Even though you're not in a hurry to scale I don't understand why you would rather leave 20% in every property and earn 4% rather than earn 1,000,000% by leaving no cash in the deal.