Lender · Tampa, FL · Member since 2013 · 2k+ posts · 2k+ votes
2y
We not only handle our money, but other people's money as well. We have both a lending and a real estate investment arm, but in both we're keeping relatively short-term. We're not buying long-term holds right now in favor of quicker "in-and-outs" with clear exit strategies. On the lending side, we're doing ultra-short-term lending or, if we're originating longer-term loans, we're selling them off almost immediately upon origination. On the real estate investment side, we are using some shorter-term leverage and injecting cash into flips and shorter-term holds, but we're not maxing out what we can borrow. Yes, our investors expect a solid return, but first and foremost the goal is to mitigate the downside risk to the portfolio. I don't throw darts at a board, and the long-term crystal ball is really fuzzy right now...particularly with the outbreak of war. We're trying to stay lean and nimble to protect investor money. That's what we're doing with the "$100K" in your scenario.
Lender · Springfield, MO · Member since 2015 · 379 posts · 180 votes
2y
@Aarielle Pannesi. I would say the tried and true method would be a combination of B,C and D. You'll need reserves always, but more now than ever. Use private money to get a rehab loan, then refinance out and get your money back. This is classic BRRRR. Going all cash only limits your options and makes B very risky. The only two major benefits to going all cash are speed and not having to answer to someone.
My clients are cautious BUT steadily doing deals. We aren't seeing much of a slowdown right now, so I'd look for those BRRR deals and use leverage.
@Aarielle Pannesi. I would say the tried and true method would be a combination of B,C and D. You'll need reserves always, but more now than ever. Use private money to get a rehab loan, then refinance out and get your money back. This is classic BRRRR. Going all cash only limits your options and makes B very risky. The only two major benefits to going all cash are speed and not having to answer to someone.
My clients are cautious BUT steadily doing deals. We aren't seeing much of a slowdown right now, so I'd look for those BRRR deals and use leverage.
Thank you for your honest feedback, BRRRR will be the route I take. I appreciate you for spelling it all out for me. This was what i found to make the most sense as well but just wanted to get the opinion of someone seasoned.