Wait to build credit or try to buy a investment property now

[Dylan Lersch]

Im a new investor and I've been running some calculations with the BP calculator and I think I have found some good deals but I do not have the best credit right now (middle 600s) and I do not have the proper funds id be comfortable with, with buying a investment property to try and BRRRR or just upgrade a few items. Should I try to save more money and improve my credit for a better rate or try to get creative financing for my possible investment. Thank you in advance. ( Also I'm in the middle of BRRR book so I'm feeling motivated )

[Nicholas L.]

@Dylan Lersch

BRRRR is difficult right now. it's also a strategy that takes cash.  there's no buying a BRRRR deal with $0 - you need cash to buy, and then you need cash every month to pay the holding costs and service the debt during the rehab.

lots of things are making BRRRR tough right now, especially the increase in interest rates and the fact that prices have leveled off. if you did a BRRRR in 2020 and just waited 12 months, prices would go up, and that would help your appraisal. that is not the case anymore. other factors are making it difficult too - there is lots of competition for deals, both on and off market; lots of good contractors are booked up; and lending has tightened a little, and it's harder to get a higher LTV.

so just to be clear: 

-BRRRR requires lots of cash - it's way more cash intensive than portrayed

-BRRRR is not a cash flow strategy - you will end up with a break even property

-if done right, you'll wait 3-12 months to get some (or close to call if you really crush it) of your invested cash back

I know this wasn't your exact question, but I had this typed up for another thread and thought it was relevant here

hope this helps