Is my BRRRR Strategy realistic?

[Jessica Parker]

Hi! I am wondering if I am being realistic about mine and my husbands goals of BRRRRing?  We have a 5 year goal to move to FL and we would like to have enough money to live on from cashflow from our properties!  I have been looking in the Alabama market and looking at very inexpensive houses that we could pick up for $20k and rehab and turn around and rent for $900/month, hopefully making about $300 cashflow per property after it's refinanced.  

We won't have enough money to start the process until February...by then we will have the cash to purchase a property and I have a lot of zero interest cc's I could use to help with the rehab process to get us started a bit quicker (more than likely using the cc's would only be for the first and possibly second deal).  I've leveraged CC's a lot in the past when a zero interest deal comes my way..It seems a lot better than a hard money loan. We also plan to continue to save $2,000/month minimum to add to our investing fund. 

Anyways,  How realistic is this, Year 1, buy 2 properties, one after another...pulling out cash invested and repeating the process.  Year 2 would scale to 2 houses at a time,  4 total in the year, year 3 would be doubling again to 8 houses..and we would continue BRRRRing 8 houses a year indefinitely until we are making the cashflow we need.  Does this sound realistic?  

I am also concerned about the refinancing part. When refinancing a property, how realistic is it to find lenders with 4 month seasoning requirements? I've heard of this on David Greene's BRRRR book and other places..I'm just wondering if that's realistic to be able to find that!? When you go to a bank to do a cash out refinance with LTV, Do they do the refinance just based on the income from the property, or do they use your personal income as well? Thanks in advance!

[Whitney Hutten]

@Jessica Parker Once I learned how to BRRRR, I did 10 properties my first year. The difference? I had a plan, a great market, a solid team, and a great lending partner. HML is not that scary or hard. It's a heck of a lot safer than personally securing all of the debt on your credit cards. With a HML if things go way south, your loss is contained to the property (not your personal assets).

As far as seasoning, it's all about how you buy (use this guide to help plan). If you are putting rehabs on credit cards, you are going to be confined to only pulling out your original purchased price (which I don't know of a bank that will lend $20K on a home) on a rate and term refi immediately. OR you will be locked into longer seasoning periods to cashout refi (most likely 6+ months). If you used a HML for everything... now you can refi quicker and pull more funds out and possibly even additional cash around month 3. Lending terms vary per lender and if you are doing conventional or commercial refis. So shop around.