What to do with $75,000 saved up

[Brad Stallings]

Hello,

current situation: I’m military and wife is a realtor. We Live in our primary home that we would like to stay in for at least 5 years. We own 1 condo that cash flows $400 a month after all expenses etc.

question? we currently have $75,000 saved up for our real estate investments but we don’t know how to approach the next buy/couple of buys. Saving up for the 75k took over a year and we don’t want to buy and then have to save and wait again. With this amount of money saved up…..what would your approach be? We would like to possibly buy one more condo and then begin our multi family journey.

Thanks in advance!!!!

[Issac San Miguel]

Quote from @Brad Stallings:

Quote from @Devonair Jackson:

I am new to this, but if I was you guys I would use the BRRRR strategy and buy a duplex, triplex or 4-plex that needs about 50k in rehab. I'd buy it with a hard money loan, find a really good contractor through talking to multiple and getting multiple bids, rehab the property, rent out the property then refinance and hopefully I can pull all, if not most, of my money out of the deal to be able to REPEAT. Remember the 4 keys of BRRRR though 1. Line up your refinance lender first (cash out refi). 2.Stay on budget and on time on the rehab. 3. Nail your ARV 4. Understand seasoning (the amount of time before you can refinance a property.

 Thanks a lot for the reply man! Really appreciate it!!!!

I like your thought process. There’s a good amount of duplexes in my area. All around the 250k range and most if not all need some work. So what you’re saying is use a hard money loan for the 250k and then finance the rehab using part of my 75k and then go from there?

thanks again !!!

Hey Brad!

Hard money loans are available for these types of fix and flip properties. 

Hard money lenders usually help with 70% to 75% of the purchase price for first time investors. You can use that $75k as a 25% to 30% down payment. They will then fund 100% of the rehab paid in draws. 

The way this works is you will pay for the work out of pocket and call in for periodic inspections as you work through your project. The hard money lender will then reimburse you for your costs to keep you as liquid as possible. 

Each lender is different and some have different criteria. 

Once you refinance out of the property the cash out is yours to keep after paying back the hard money lender the total balance of the loan.  The remaining proceeds of the refi are yours to keep, and you have most of not all of your original investment returned to you as well as a hopefully cash flowing property in your portfolio. 

Like others have said, rinse and repeat.