Getting back into the game: BRRRR/Refi question

[Alfred Koenig III]

Hi everyone, I am Freddy Koenig. I am a recent Pro Member on BP and have probably listened to about 100 podcasts now in the past 2 weeks which have been a great listen. I also just recently purchased David's BRRRR ebook which has been enlightening to say the least. Wish I had read this book 4 years ago when I first got into real estate.

I am looking for some advice here.

Currently I have 2 SFH properties in the San Antonio, Tx market:

Property 1. Conventional loan, 10 year term, 4.625%; $30k invested; ~$75k equity

Property 2. Used hard money to purchase then refinanced w conventional loan, 30 year term,5.25%; $15k invested, $70k equity

I wished I would have read David's book prior to purchase where I had enough cash to fund the entire project, BRRRR it, and pull out 90-100% of my investment and repeat to do deal #2 and so on and so on.

Here is my question, I have the cash now to pay off property number 1 and then could cash refi to pay off property 2 which is option A. I also have a couple other options.

Option B: I also have ~$200k equity in my primary residence; so can HELOC and then use those funds to pay off properties 1 and 2 to continue to BRRRR.

Option C: I have a private money partner willing to loan money to me; my challenge there is I don’t know how to structure the partnership deal. Was thinking either an equity stake and/or cash flow share; not too sure to be honest with you.

or Option D: Sell both properties and then use the cash from those properties to start over the BRRRR process from new property 1 and so on and so on

My goal for the next 2-3 years is to purchase 3-5 single family/multifamily homes (1-4 units) per year before graduating to larger multi units. I am hooked up with a wholesaler as well as with a few agents and want to start making moves; I just want to make sure my initial step back into real estate is the right one.

Looking forward to any and all feedback.

Best regards

Freddy

[Alfred Koenig III]

Appreciate the patience, and I understand the leverage concept. But perhaps I'm misinterpreting the suggestion David Greene made in his BRRRR book when he said he would recommend when getting started to if possible buy your first property outright w cash and then cash refi to purchase the next property.

So i guess my question would be does it make sense to payoff/cash refi my first property to then essentially follow David G’s advice to then purchase the subsequent properties. If I payed off propriety 1 and cash refi, I would actually pull out about 125% of my investment and thus increase my cash position. And perhaps I’m just over complicating the thought process as well.