BRRRR or Traditional financing for first deal

[Account Closed]

Hello,

I want to start investing in Real Estate. I am 24 years old, I live in San Francisco, and I have a cash budget of around $25,000 so I am looking out of state. I have spent alot of time researching markets and my current frontrunners are Memphis TN, Jacksonville FL and Huntsville AL. I have been looking at properties and am so far unsatisfied with rent ready traditional financing options. I have also been researching BRRRR strategies using hard money loans which seems much more attractive to me given that I am very willing to do more work to get a better cashflow and returns. I have two big questions at this point.

1) Is it foolish to take on BRRRR as a first deal? Would it make more sense to cut my teeth on a less juicy deal using traditional financing and ramp up from there?

2) Is BRRRR feasible out of state? I would think finding a trustworthy GC out of state would be very difficult. Do people on BP often give GC recommendations?

Thank you for reading this and I hope to get lots of good feedback on these questions and anything else. Please poke holes in my assumptions or thought process!

[Matthew McDermott]

@Tucker Fife

@Tucker Fife

You're knocking it out of the park with what you're doing at 24. I can tell you're learning the important stuff and wanting to be smart with your deal.

Huntsville is my favorite investment market in the whole country.

I don't think a brrr is too much for a first deal. My first 3 were brrr. What I might say is to take on a light remodel with your first nest egg you're using. I wouldn't want to take on a job needing to move walls, electrical, plumbing etc in a real old house that you never know what all will be involved. You could do a lighter remodel though.

I wouldn't be worried about doing out of state either. Im a local Huntsville Real estate agent, property manager, and run a remodeling company to help our clients have 3 of their core 4 at one stop. Almost all of our clients are out of state. Talking with references of other investors who have used the GC, PM, and Agent is paramount especially those who have done brrrs. That way you feel can sleep at night knowing you're working with someone who is not fly-by-night but has a reputation and commitment.

Send me a message with your questions. Would love go be a resource for you as you grow your portfolio