Looking for Options

[Sean Autry]

Hi All- looking for some input here. I recently closed on my first rental property in Apple Valley, CA. It meets the 1% rule, it should cash flow nicely (for CA), it'll produce a great return- I'm very happy about it. HOWEVER, now that my first deal is done I realize that saving up a chunk of capital before each deal is a very slow way to build a portfolio. My goal is to be a full time investor. I find it much more interesting and exciting than my day job in corporate finance. Accordingly- I need to do more creative deals. The BRRR strategy is the most attractive to me, but I'm thinking it would have to be out of state given CA prices. My questions: who here has had success implementing BRRR from afar? Can you share your experiences? Pitfalls to avoid? Tips for success? are there any other cash flow strategies that I'm not considering that'll allow for limited initial capital or the recycling of the same capital? Thank you in advance for your input.

[Scott Hollister]

Hello @Sean Autry,

Congrats on the first rental property! 

I had the same issue/realization that it takes a long time to build a portfolio that way. 

So like you, I have realized that adding value and forcing appreciation go a long way in getting houses for "free". I have focused my business on the BRRRR strategy. (In my farm area with me doing the majority of the work, paying myself on the refinance)

If I were to do it from afar I would need boots on the ground. A team in place that I could trust to stay under the 75%-80% LTV during repairs. That way when you refinance you don't have to come out of pocket with money.

I think the other strategy that might be helpful is the partner deal. A bank loans 80%, partner 20%, you split profits (you manage) and pay the partner off from profits. (You are still working for the money, but you don't come out of pocket)

Important bullet points for your next investment property:

• Purchase a wise investment in an area that you know well enough. 
• Pick a creative strategy that works (Remember the possibilities are endless) 
• Use other peoples money, see here!

I stole one of my most recent goals from Grant Cardone after listening to his audio book (10x)

"I have no debt except that which is paid by others"

So choose wisely and remember you can do anything you put your mind to!