All Forum Posts by: Amanda Brezina

Thanks, @Ben Parrish - same!

Thank you, @Cameron Tope. They are there, it just takes some extra digging! This one was on the market for over 100 days! Plus the inspection paid off, because my agent was able to negotiate more off the purchase price!

@Joe Norman, thanks! We've been in the Northeast area so far. Low crime areas are where we start. 

@Evan Zeigler, thanks for the note! Definitely read the book. It was a huge help! Best of luck!

@Ozzy Sirimsi, thanks! Northeast Baltimore.

@Caitlin B., we spoke to members of our team and got a recommendation from our agent. We had planned to use our planned Property Management company's contractors as a back up plan. Talk to people in the area to get recommendations! It's definitely an important part of the process, so it takes some time to build the trust. We just finished our second with the same team. I was pretty a hands on for the first property - there often to understand the process. Due to travel I was pretty hands off for the second. I've learned I need to be in the middle, to get ahead of some issues before finding out about them in the end. Get lots of estimates for your first to make sure you are choosing the best members for your team - I chose to go with one contractor for all, which probably cost me more, but made the whole process run more smoothly only having on GC to go through. He managed the subs. In the end I think it saved me money by taking less time on my end. Best of luck and I hope that it plays out well!

@Alan Hale - good question! The HML was the biggest headache for me in this whole process, but that was because I didn't understand that part of the process entirely, so that was partially on me :-) I've only worked with one, but I know most are similar with the draws. They do fund 100% of the rehab, but they won't allow you to draw until you can prove the work is done, so if you need to pay for materials for your contractor to get started, that will be out of your pocket. It will be reimbursed once the work is completed, but make sure you have the funds so you don't get caught in a Catch 22 situation where you have to pay your contractor, but cannot withdrawal the funds because the work isn't completed. It's to protect you, so you don't give the contractor too much money to ensure the work is completed. It's also an incentive to keep the rehab on schedule, because although you don't have access to 100% of the money, you are paying interest on all of it. I see both sides but it's still a headache - just remember it's allowing you to BRRRR!, Make sure you ask those questions and understand what is needed for the draw process before you get started. For the first draw, the owner had to come by to walk the property. For the second, I just had to send videos. So the more the trust is established, the more hands off they've been. If it's a good HML, they are a wealth of knowledge and are usually willing to share to help you out, so don't be afraid to ask questions! Good luck!

Hello! We just purchased our first duplex in Shamokin, PA. One unit is rented but the other will be rented one we get it fixed up. I was wondering if anyone is familiar with that area and would have any recommendations for cleaners, handy(wo)men and/or property managers they know/have used? We need to have the top floor repaired and painted (plaster), bathroom remodel, floors redone, and eventually have the outside resided/roof replaced. We're also looking for someone that may want to manage this as a short term rental eventually - it's close to AoAA and Rausch Creek offroad parks. Thanks in advance! All recommendations welcome! 

Thanks, @Drew Sygit!

@Doug Spence, we're in Baltimore, MD. We live within an hour, so we started investing in an area that we were semi-familiar with and visit often! Great questions! One of the things we're trying to do differently is to get away from using a Hard Money Lender. Not so much because of their terms, but because it's been the biggest headache of the entire process. Admittedly, on our second property (we had to use them again), they've been better, but it's a lot more micromanaged than I had anticipated and the trust isn't there - although that should improve over time. I think it's a great option to get started, but the sooner I can get away from it the better, just because of the time it takes working with them. This is the only HML I've used, so maybe it's just this company, but I wasn't expecting to be so micromanaged. That was my first BRRRR, but not my first rental, but they still treated me with the first property as an amateur that knew NOTHING - had they had a conversation, we could have gone into it with a bit more trust. So, what we're planning to do differently is to use a HELOC we just closed on to fund the next properties. We're hoping that speeds up the process and makes our lives a lot easier, controlling the money ourselves! Thanks for asking and the congrats! I appreciate it!

We just finished refinancing our first BRRRR property! Time to repeat the process!

We learned a lot on this first one. It went better than we anticipated it would. We had a fantastic team helping us out and are so grateful for all of you in this community for all of the information you've shared and your support!

We just finished the most nail biting part of the BRRRR (Buy, Rehab, Rent, Refinance, & Repeat) process - the refinance! Which means we only have one step remaining - Repeat!

The refinance was the most stressful for us many reasons. First and foremost, the ENTIRE process relies on a successful appraisal so that you can get approved for the loan amount you need to meet all the numbers you crunched to cover all of the costs (purchase and rehab) of the home. Secondly, it's our first refinance out of a hard money loan - the unknown! And finally, we had never done a cash out refinance before, so we knew it would be weird getting money at closing!

This was our first BRRRR property and honestly we went into it expecting the numbers not to be great when it comes to this methodology. We were expecting that our purchase and rehab would be about 100% of the LTV (loan to value), when a good BRRRR is 75% or less. We wanted this first one to be a learning experience and figured having a big rehab would give us that experience working through the entire process. We expected to leave our 20% down payment in the property and plan for the 75% of the loan to cover our hard money loan if all worked as planned.

With the housing market taking off leading up to the refinance, this put us in an ideal position to possibly consider doing a cash out refinance instead of a standard refinance. Meaning, we expected the appraised value to be high enough, that we could take a loan out that would both cover our hard money loan (purchase and rehab costs) AND take some extra cash out. That extra cash would be ideally be around our 20% down payment we put down to purchase the house. That took our planned three months refinance to the six month, but if it meant getting our 20% downpayment back, we were game. A gamble, given it was a guess the house would appraise for what we expected.

When we originally discussed this with our agent and mentor, these are the numbers we presented. A note about our process - we run our numbers pretty conservatively for the ARV and rent, assuming worse case scenario:

• Purchase: $60,000 (listed for $75,000)
• Rehab: $65,000
• ARV: $130,000
• Rent: $1,400
• Hard Money Loan: 12%, 3x points, 1 year term - interest only payments
• Return on Investment: 7.1%
• Cashflow: $342 (amount remaining after mortgage payment, 10% vacancy, 5% Repairs/Maintenance, 5% Capital Expenditure, 10% Property Management are paid)
• Purchased: March 2021

When you refinance, most banks will authorize a loan for 75% of the Loan to Value (LTV), so we were expecting a $97,500'ish loan (75% of $130,000). We knew we'd be leaving a lot of equity in the property (our down payment), but we were viewing this first one as a learning experience with a big rehab, hoping it would make future rehabs easier because we had already been through a big one. Thankfully we had a contractor that friends of ours had used to do similar work, so we were incredibly lucky for that, meaning there was some trust in the contractor from the get-go, translating to less stress.

The housing market explode over the course of the rehab, which drove home prices up higher than we expected. Great news for an upcoming appraisal - we hoped! So what did the numbers actually look like after it was all said and done?!

• Purchase: $60,000
• Rehab: $67,500
• ARV: $190,000
• Rent: $1,549
• RoI: Infinite
• Cashflow: $286
• Mortgage: $135,000 @ 3.125%
• Refinance Date: November 2021

$190k!? We were optimistically hoping for $175k, but a couple of recent sales in the neighborhood, to include next door, set us up for success. We decided to leave some equity in the property with that appraisal amount; our new loan could have been up to $142,500, an extra $7500 plus the required 25%, but our goal overall was to maximize cashflow, so leaving equity in the property meant a slightly higher cashflow.

So what's next?! Our second property is on the same street. We paid a bit more for it given the rise in home prices but it was also in slightly better shape. We plan to follow the same rehab plan, given it worked so well for the first one, so fingers crossed Property #2 has a similar story to tell!

Property #1 was a great learning experience in many ways. I cannot thank my team enough for a successful first purchase! We learned so much and gained a lot of confidence in the BRRRR strategy.

Thanks again to everyone. Time to finish up Property #2!

Thank you @Andrew Postell for sharing the post and to @Dan Schwartz for making sure the post was in this thread. I appreciate the reference. Very helpful!

Awesome, thanks @Robert Rainey for your expertise and insight. I appreciate it!

Hey @Robert Rainey, thanks so much for the response!

Did you make it a point to have the rehab cost included on the HUD, or were the banks ok with refinancing the entire HELOC loan without that listed?

I run my numbers for a 75% LTV, so that should be no problem. It sounds like most lenders still look for the six month seasoning though, even if not doing the cash out? Did you use the same lender for all six refinances?

Great to hear that this has worked in multiple states as well! Thanks a ton for your input, I really appreciate it!

Hello! I recently closed on my second BRRRR property and am looking for the third.

I used a hard money loan for the first two and recently closed on a HELOC on another property. I have enough in the HELOC to purchase and rehab most of the properties I am looking at, so I was wondering if you all could provide some advice for using the HELOC for the BRRRR and ensuring the rehab amount appears on the HUD for ease of refinancing once the rehab is complete.

Or, is that something I made up in my head? 

I just want to make sure that I am able to refinance the ENTIRE HELOC loan, not just the purchase price. I know for the first two properties, the rehab amount appeared on the HUD due to the use of a hard money loan. Would that work the same or is there an additional step(s) I need to do to ensure I can refinance everything to payoff the HELOC? I do not plan to do any cash out, just refinance the cost of purchase + rehab, so that I can repeat and speed up the building of our portfolio through the use of the HELOC.

Thanks in advance!

@Qua Redditt Welcome! I’m just getting started in the Baltimore area as well!

Thanks so much for the welcome, @Ozzy Sirimsi! Great to see another Baltimore'ian on the forum! I appreciate the offer for advice. I'm sure I'll be in touch! Thanks