BRRRR my first house that I own?

[Derek Wilcox]

Hey everyone, I am going to be buying a single family home for my wife and I in the next few months. I have been reading and listening to a lot of stuff on BRRRR investing and really want to get into it. My question is, can I do it on a home that I am living in myself? I would like to buy a home, fix it up for the next year or two while living in it. (also so that we get occupancy there for the loan) then try to refinance and start renting it out after hopefully buying a 2nd home for us to live in. Are there any flaws to this strategy? I want to make sure this is a good decision before actually getting to that stage. Thanks!

[Brent Paul]

I don't see any reason you couldn't do this.  I know of several people that do this and buy another house every 2 years.

A few things you will want to check is rental rates in your area and also get some solid comps for the house you plan on fixing up.  

Run those numbers several times and make sure they work for you.

Things can sometimes get a little hectic living in the house you are fixing, but it can be done.  Be sure you have money to cover any extra expenses that come up.  Get some good estimates on repair costs.  I like to go 10 percent above that to cover things unknown.  Once you start tearing into floors and walls there is no way to know what you find.  A home inspector will find some issues, but not everything.  I had all kinds of things break my first year of ownership.

People often overlook things like water heaters, water softeners, furnace, and air conditioning.  They can be costly to replace.  I replace any water heater or softener 10 years or older.

If you get enough equity built you could possibly do a HELOC and use that as a downpayment.