First Rental: BRRRR or Traditional Financing? (First Post!)

[Phillip Henry]

Hello everyone!  My wife and I live in Athens, GA and just bought our first house last year.  It has a basement apartment which has helped us save up some money (YAY for house-hacking!) and now we are looking to purchase our first pure investment property (single family rental).

Here is my question... Should I BRRRR the first one or go the more conventional route with traditional financing? The built in equity and velocity of money is very appealing with BRRRR, but the process sounds much more involved, especially for the first time around. We would also need to delay purchasing the property until we can save more money. To avoid getting in over our heads, the other option I am considering is purchasing a less distressed property with more minor repairs, but we would have to borrow money to purchase and start saving for the next one from scratch instead of leveraging this purchase towards the next one.

What are your thoughts and experiences? Are these the only 2 options?  

Additionally, I am looking for ways to find good deals outside of our Real Estate Agent and Zillow / MLS. Do any of y'all have experience with purchasing through tax sales or other creative methods? (GA is a hybrid tax lien / sale state).

Thanks for the help!

[Whitney Hutten]

@Phillip Henry All of those options are viable for getting started. It really comes down to how much you want to bite off right now to learn, and your risk tolerance. BRRRR is great at creating velocity of money, AND there are a few wild card landmines to avoid (construction, refis, etc). I took a gliding path to BRRRR investing (turnkey, mls, light rehab, full guts), but surrounded myself with a team that could support me as I built my skills and confidence. If you are going to scale quickly, it might be worthwhile to find a mentor as well. The most import part is you take action :)