Just getting started in Kitsap County, Washington

[Nicholas Bankus]

Hey BP community,

My name is Nick, I have been bouncing around the peripherals of BP since I did my first webinar on the BRRRR strategy back in October 2016 with Brandon (go PNW - land of beards and beers). Now that I am coming up on finishing my master's in engineering (life goal, check!), I am getting much more serious about REI. I want to get into buy-and-hold rentals, maybe even using the BRRRR method if I am feeling real saucy. This is to support the goal that my wife and I have set of being financially free at 40 (we are currently 28)! I feel I have a pretty good lay of the land in Kitsap since I grew up here, but any advice would be extremely welcome!

Also, I volunteered a friend and myself to do a personal finance presentation at my old high school. We are both extremely interested in the subject of personal finance (saving/investing for FIRE - financial independence retire early) and wanted to try to share the good news about F-You money and what it can do for you. We are mostly focusing on the importance of saving, having a high savings rate, and funding your own retirement at an early age (FIRE), but also discuss debt, stock investing (index), insurance (always a losing bet), and a few other items that kind of fall into the personal finance realm. We don't really want to discuss REI because neither of us are real estate investors (yet). Although we understand the basic concepts it feels disingenuous to talk to the students about it, however BP will be on the list of recommend information resources. If you have any suggestions about other big picture topics leave a note.

Sorry for the long intro, I am super excited to be here and looking forward to purchasing my first investment property in 2017! 

-Nick

[Kevin Romines]

Welcome to BP @Nicholas Bankus 

It sounds like you have a great background that will lend it self well to the investing industry. I can also see the fire, what a great thing to have at an age where you can make things happen and hit your goals early.

You mentioned the BRRRR stategy and I personally love this strategy. There was a time when people could just go buy a solid rental and didn't have to do the rehab and yet it still gave a solid return. I'm guessing for the most part, that will be difficult to make work going forward. The prices of all homes in our area have been pushed up due to the mortgage meltdown and an overall lack of new construction that stemmed from that time and now today we are in a lack of inventory situation which is driving prices up on both sales and rentals.

Because of this, the BRRRR strategy will be even more important going forward into the future, as it may be the only real consistent way of reaching the returns that you would want to hit.

With that said, you must know the strategy that will finance your fix and flips, from there, you must have a solid strategy to refinance into conventional rates and hold them there for as long as possible. Then if your successful and have 9 financed properties, you will run into Fannie Mae's limit of 10 financed properties rule. So you must know the strategy that will allow you to move those deals to a portfolio or commercial loan at the best terms you can find, while not having those properties still count as financed properties. Because they are not counted as financed properties, you therefore have a clean slate on the conventional side of things and can now do a new 10 financed properties through Fannie Mae again. Rinse and repeat and you can buy and hold as many properties as you may ever wish to buy. Maybe 100? Maybe 200?

Then what is next? Well most go to multi-family, so you have to have solid financing there and understand what terms the industry keys in on, and what are the creative strategies there?

I tell you all this only so you can spend some time in thought and decide if this is the path that your on? You must know these things to successfully navigate your course as you go. All these things can be done and are being done by some of the few that know how. Seek out that info. you wont be disappointed.