Can you do BRRRR with little amount of money?

[Justin Stetson]

Hello everyone,

I am trying to find out how everyone got started with their BRRRR strategy. My main question is how much money would someone need to be able to get started. If it's a high amount (50k) would it be smarter to use my VA house loan and buy a multi family and rent out the extra units than try to approach the BRRRR strategy again. Thank you all for your time.

[Tyler Gibson]

@Justin Stetson The BRRRR strategy is awesome and powerful but requires more knowledge and experience then most people tend to think. If oyu don't have enough cash to buy the property out right to start you will need to barrow hard money and need to be able to find that lender and account for the cost of that money. Now that you found the money and have accounted for the cost of it in your calculations you need to be bale to calculate accurately how much it will cost to fix up the property. Remember that as part of this calculation should should know how long it will take you to rehab since that will affect your cost of the money you borrowed. Ok now you got the money figured out the rehab figured out not lets rent it. You have to know how to market the rental, how much you should charge for the rental, Oh and get a good lease, screen your tenants well and find a good tenant. Great you got a tenant now you have to manage the property for 6 months to a year to get seasoning before you can refinance. Ok Seasoning time is up now find a lender. Found a lender, great! now will the home appraise at a value that will be high enough that with a 75% LTV you will be able to pay back all the money you borrowed along with the money you invested in the rehab? I see many stories where this is the catch people spend too much on the rehab or don't buy low enough or estimate the ARV to high. They end up leaving 20k or more in the property and it is a decent deal but not great.

The option of using your VA loan will help you get familiar with the process of buying and if you rent rooms you will get familiar with the process of renting. This would allow you to wade into th world of investing with a little less risk and you hopefully will be able to reduce your cost of living and increase you savings rate putting you in a better position when you have all the knowledge and skills needed to make the BRRRR happen.

BRRRR is a little complicated and I believe it is an advanced investing strategy. The acronym that has been coined has made it seem like an easy thing to do and it is not that easy. You have to have some knowledge and some skills and know your numbers for it to work out the way it sounds on the pod casts.

I hope not to discourage you because you are on the right path by simply asking the questions and starting to learn. I wish you all the best and I hope you jump in with your VA loan and House hack to start but if you think you got the knowledge and skills to BRRRR then do that and tell us all about the journey.