Supercharged BRRRR Strategy

[Jordan Davis]

Hi y’all, I’m new to real estate investing and looking for some advice. I bought my own primary residence two years ago and fixed it up then sold it when I switched carriers and moved out of state. Fixing up that first property really gave me the bug for doing some investing.

My business partner and I are looking to get into Real Estate Investing within the next year. We are in a unique situation and I wanted some advice on getting started with BRRRR. We both work together and our main occupation has two income streams, one of them is commissions (Which we plan to live off of while we get our real estate investing going) and the other is a residual income stream we can continue to build every year. The problem is that the residual doesn't last forever. So we are going to start investing all of the residual income we make into Real Estate. Our goal is to build assets and a passive income stream to allow us to retire. Our plan was to build up our residual income stream through our main job every year for about 10 years then retire from our day job and just focus on real estate. Each year we would both contribute about $35k in residual to our real estate fund.

Our initial idea was to put a down payment on a property with our residual, then keep sinking our residual Income into that property until it’s paid off and then move on to the next property. The reason we liked that idea was we could pay the properties off fairway quickly and build a big enough cash flow by then end of 10 years that we could easily both live on. I ran a few different scenarios but we basically we could have close to 20 paid off properties in 10 years. Then at that point just keep acquiring new properties with our dwindling residual income and anything extra from our rental income stream. We liked that we would have no debt with this option. 

The other idea would be to use that money to supercharge the BRRRR strategy. So We would save the residual for a year or so until we had enough capital to buy and renovate a property then rent, refinance and repeat. Each year we would have close to an additional $70k between the two of us from residual to add to this BRRRR fund so it could really ramp up quickly. At the end of 10 years we would have a lot more than 20 properties and a large amount of money to continue BRRRRing.

Obviously the BRRRR method is what we are leaning towards. My concerns are these:

1- Is there a limit on how many mortgages you can have? 
2- Is it risky to have 40+ properties with mortgages on each of them and that much debt? 

3- Is there a different strategy that would work better than BRRRR with this situation?

Thanks in advance. Just trying to put together a good strategy before the wheels really start to roll.