Ep. 310: A Repeatable Path to Early Retirement w Jenny Bayless

[Mindy Jensen]

Looking to find financial independence through real estate but don’t want to be responsible for a portfolio of 100 homes? Well, that’s exactly what today’s guest is doing!

Jenny Bayless is a real estate investor in Colorado who is using long-distance investing principles to systematically build a portfolio of cash flowing properties using the BRRRR method! Jenny is absolutely crushing it by "making" deals in today's tough market and shares what she looks for that other investors miss.

Learn her system for targeting fixer-upper properties, how she estimates rehab costs, and the method her real estate agent uses to send her videos of potential properties so she doesn't have to drive hours to see them. Jenny also shares how she uses hard money to buy "cash," how she found a rockstar agent, and how she backed into an "accidental BRRRR" that led to future success!

Today’s episode is equal parts inspirational and practical with TONS of actionable advice. If you want to retire early with real estate but don’t want the headache of managing 100 homes, don’t miss this show!

Listen here or on your favorite podcast app.

[Jenny Bayless]

@Dave Fagundes- I'm glad you enjoyed the episode!  

I think you bring up an awesome question/observation!  Here are my experiences:

1. I have experienced the same issue you have with the 6-month seasoning requirements for a cash out refinance. We also recognized this would be a hurdle in being able to turnover and stabilize properties as quickly as we wanted. Personally, I could not find any local or institutional lenders willing to waive the 6 month seasoning requirement for a cash out (but that's not to say they aren't out there!). A strategy that we adopted in a few instances to be able to turn over these properties faster, is by utilizing a private lender/HML in conjunction with a rate/term refinance (opposed to a cash out). We have private lenders that are willing to lend 100% of purchase price and renovations, not to exceed a percentage of ARV. What the rate/term refinance does, is a 'conventional lender' (caveat: always check with your lender!) can refinance the rate and term of that private loan (so for example, taking a 3 month 12% interest rate loan for $120k to a 30 year 5% interest rate loan for $120k). Our lender requires the loan to come in at 80 or 85% of appraised value. No cash has changed hands during this process of the refinance, and now we are able to get the property (a good example of this is in the Deep Dive) for just a few thousand dollars out of pocket (some additional renovations not covered by the loan less the purchase price). Of course, this method exposes you to the risk of having to potentially bring money at the time of refinance to close out the first loan if the property does not appraise for what you had estimated originally.

2. Definitely a great point to bring up. The way I consider it is, say for example you can pull out $30,000 in a cash out refinance BRRRR. At 5% interest, that increases your monthly payment by about $160 a month upon completion of the refinance. Say for example on house #1 you were originally cash flowing $500 a month but are now cash flowing $340 a month (due to the increased mortgage payment). If you re-leverage that cash you took out and applied it to acquire property #2, and that property cash flows $400 a month, you've now increased your net cash flow from $500 (just prop #1) to $740 per month ('new' cash flow of prop #1 and prop #2), in addition to both properties are now able to realize all the other benefits of real estate, such as mortgage pay-downs by tenants, etc.

Hope this helps!

Jenny