Completed BRRRR Staregy

[Kenneth Garrett]

I thought I would share a success story. Bought a 3/1 882 square feet. Small ranch on a crawl space. Offer was a three letter option; Cash, Seller financing, and a combination of seller financing and a down payment. Seller took cash instantly. (Darn it, I offered to much, but numbers work) Bought 85K rehab 15,000. Projected ARV to be 115-120K.

Rent is 1275 - taxes 187 (month) Ins. 38 = 1050 (NOI) P&I 597 = DSCR = 1.76 Received 80% LTV DSCR numbers good. Commercial Loan

Cash Flow $453.  I don't worry about maintenance and vacancy 2 year lease and bank the cash flow.  Pay off property asap.

Rehab:  kitchen, electrical panel, Front stoops, level floor, misc items. Rehab 4 weeks refi took 10 weeks (banks slow process)

No money stuck in 100% refi.

Share your thoughts.

[Patrick Ryan]

Good Call Greg S. I think its important to realise that instead of investing the money into paying the property off, you should get another property, as the ROI would be better than earning a 4.75% (or whatever your interest rate on the refi is). Its basically sounds like your ROI is infinity (except for your sweat equity and time) so infinity beats 4.75% all day.

Of course at some point in the game, you are going to stop investing in new properties, so my advice is to sit down, analyse the NUMBER of properties you want to determine exactly how much net worth you want to accumulate. 

My number is 25 properties. I'm currently at 5 and have a BRRR refi coming in to bump me to 8. I've calculated 25 properties will accumulate to be roughly $4 mil in equity when I cash them all out 20-25 yrs from now, and thats my number I am happy with. Determine your goal first, then make the moves to get you to that number of properties. Once you reach the number of properties you want, THEN start paying them off.