How is anyone making $ right now?

Orlando, Florida
BRRRR - Buy, Rehab, Rent, Refinance, Repeat
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How is anyone making $ right now?

Ell Jay Lindsey
Rental Property Investor · Grant, FL · Member since 2015 · 18 posts · 15 votes

Hi, I'm a new investor with 2 rental properties (Paid Cash, Full Renovations needed on both so that's where my experience comes from, now their successful rentals) & a fairly successful small multi-family flip out of state. I analyze multiple off-market deals thru wholesalers & my local network that know I'm a "Real" cash buyer on a daily basis and I can't get ANY deals to pencil out to cashflow if using the BRRRR method at 7-8% rates. Cut the purchase by 50% off asking, little to no renovation budget & still deals aren't cash flowing if you pull any money out. What am I missing? How are people making a "business" of investing using this method at this time? Those same deals with logical numbers I can flip & make $15-$20k estimated but personally that's not what I want to do....but is that what most are doing right now just to keep their Real Estate business flowing?

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Bill B.
Investor · Las Vegas, NV · Member since 2013 · 8k+ posts · 10k+ votes
2y

Obviously "real cash buyers" cash flow. People doing 1031's of paid off properties for replacements that are only 20-30% more expensive. People switching to MTR or STR are collecting 2-4x the rent. House hackers who are more concerned about saving rent or are doing rentals by room. LTR landlords are the most price sensitive and have to pay the least. They will only win by finding or making deals the others don't know about or taking a worse deal. Imagine if they accepted the same returns LTR landlords did. They'd be paying even higher prices.

Ps. I just did my first 1031 to buy my first new build. It equates to 60% down and a builder buy down of the rate plus closing help and it would still look like a bad investment to an outsider who didn’t know about the $100k in taxes I saved. 

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  • Jack SaundersPro Member
    Rental Property Investor · Greensboro NC · Member since 2024 · 39 posts · 21 votes
    2y
    Quote from @Jay Hinrichs:
    Quote from @Ell Jay Lindsey:
    Quote from @Jay Hinrichs:
    Quote from @Ell Jay Lindsey:
    Quote from @Jay Hinrichs:
    Quote from @Travis Biziorek:

    The only answers here are you need different markets or better deals.

    That said, if you're executing a true, full BRRRR it's a bit unrealistic to expect to get much cash flow after the fact.

    If I can get all my capital back (or real close) I'm content with operating at break even. It's essentially a free property and rents will go up over time, etc.

    We're still doing plenty of strong cash flowing deals in Detroit but there's a balance. The more cash you end up leaving in it after a BRRRR the less net cash flow is left (generally speaking).


    Or god Forbid you put some equity into the deals.. the idea that you can buy reahab and refi and not have any money in the deal works in very specific markets it simply does not work in most though so you dod the deal and maybe you get 70 or 80% of your cash back if you want to break even or cash flow positive.. if you want all your money back then U take negative cash flow until you refi and rents rise both might happen in a few years.. so temporary negative cash flow.
    Virtually every investor on the west coast that is paying wholesalers or off MLS etc with all money returned on refi or minimum down will be negative cash flow for a few years.. but then appreciation kicks in and thats were real wealth is created not making 200 a month.
    I agree with this. My post was to see what all these people saying they are investing in LTR, BRRR’ing out, having positive cash flow & not leaving any $ in the deal are doing bc I haven’t seen that it’s possible 99% of the time. Some deals pencil out in non appreciating areas but that obviously comes with a risk. But if you are going to do what you said above then it’s not a real “business” that supports itself until time passes.

    totally disagree with this statement.

    "
    But if you are going to do what you said above then it’s not a real “business” that supports itself until time passes. "

    its a real business might not support it self day one with zero equity in it.. but its real and those that buy those assets are the ones that get wealthy .. far more than those that buy assets that do not appreciate or if they do very little but collect a few bucks a month which you know what happens to that it gets pissed away .
    I should have clarified what I mean by “real business”…RE isn’t a business that supports itself immediately like a service based business. It’s a long term investment. I’m just wondering how people seem to be supporting themselves by RE Alone in this environment. 

    they dont is the answer not at that level.. if you have max leverage you need LOTS of doors LOTS of debt.. most that do this have other income or those in the business have transactional income like flipping homes then keeping a few a year .. your in the business but you cant live on rental income alone unless you start with a ton of equity up front or build up a large number of doors  and all the assocciated debt that goes with that.
    Well said!   I use my annual bonus checks from my full time job and stock rewards to provide cash to finance my property investments.  I focus on buying rentals for cash flow and long term appreciation, as well as flippers when I can make a good return on profit.  I just rinse and repeat,  I am by no means an expert but a millionaire now from hard assets.  I just always focus on my money making money. 
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  • Melanie P.Pro Member
    Rental Property Investor · Member since 2023 · 1k+ posts · 922 votes
    2y

    Frankly, BRRRR is a starting point to get a few properties under someone's belt. But it should come with a caveat - BRRRR-R BRRRR a few then focus hard on REPAY - pay down the loan balances and increase real income/cash flow to support your next (hopefully bigger) move. Otherwise, if you just keep BRRRRing it will eventually be BRRRR-B (bankruptcy).

    0Reply
  • Carlos Ptriawan
    Member since 2019 · 7k+ posts · 4k+ votes
    2y
    Quote from @Ell Jay Lindsey:

    Hi, I'm a new investor with 2 rental properties (Paid Cash, Full Renovations needed on both so that's where my experience comes from, now their successful rentals) & a fairly successful small multi-family flip out of state. I analyze multiple off-market deals thru wholesalers & my local network that know I'm a "Real" cash buyer on a daily basis and I can't get ANY deals to pencil out to cashflow if using the BRRRR method at 7-8% rates. Cut the purchase by 50% off asking, little to no renovation budget & still deals aren't cash flowing if you pull any money out. What am I missing? How are people making a "business" of investing using this method at this time? Those same deals with logical numbers I can flip & make $15-$20k estimated but personally that's not what I want to do....but is that what most are doing right now just to keep their Real Estate business flowing?


     I am selling real estate and reinvested to hedged portfolio dividend with total dividend return between 16-40%.
    Doing flipping only for real estate appreciation and no longer interested in cash flow property.

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