Scaling Strategy using BRRRR/DSCR/HML - Please Advise

[Tony Pellettieri]

We are currently in the process of preparing to close on our 3rd Investment Property. Originally we planned to Fix/Flip/Sell houses in our farm area using all of our own cash. Doing so would trigger the need to pay Taxes on gains, additional closing/agent costs to sell our properties, and provide no residual income or capture of any benefits related to holding a property in a high growth area. We now have a new strategy which we are asking for input on before we move forward at a fast pace to scale quickly in 2024.

We plan to use a HML for the Acquisition, Pay cash for Points/closing/repairs(no HML draw costs/waiting periods). After repairs are complete, get a renter in ASAP using a property management company/Cash flow positive, obtain DSCR Loan for $100,000 - 105,000, repay original HML, Net additional cash of $23,800 on each property and repeat the process.

With the capital we currently have, I believe we can put 1 similar property under contract each week, close in 2 weeks, Refi 8 weeks after closing/rehab/renting and repeat the process. In year 1, I calculate being able to acquire at minimum 42 properties, after the initial 2 month period to close on first Refi, using only our original cash, if consistent. If investing all of our net additional cash, an additional +6-8 in Q2, +14-16 properties in Q3, and +20-25 in Q4. If sourcing private capital to use for cash at time of purchase, in addition to our own, I feel like this could magnify those number even further.

While scaling, I know we'll need to bring on additional parties to assist with property acquisition, Project Management, and property management.

What are your thoughts??

3rd Investment Property - ARV $130,000 - Purchase Price $60,251 - Repairs $17,500 - Rehab Time frame 4-5 Weeks

Acquisition 
20% of HML $12,050 + Points/Fees $1,500 + Repairs $17,500 + Closing Costs $950 + 3mo I Payments on HML $1,000

Refinance
$105,000 DSCR Loan - $48,200 Aqu HML Loan - $33,000 Initial Cash Invested = $23,800 Net Cash Out