All Forum Posts by: Amr Rashad

Thanks @Jaysen Medhurst - that's exactly what I'm doing now.
Let me run these numbers and I'll post them here for you guys to review. Again, I know this will only be 'the plan' and reality could be much different, and the market changes. I still want to plan this out as much as I can.

Will circle back to you guys once I have the numbers figured out.

@Terry Fox - thank you for chiming in! When we first moved to Ellington, I drove around to try to find if any multifamilies are present and noticed the area around Hoffman road is the only one that seems to have any.

I'll go check it out to see if it's still there, and if the numbers make sense.

@Filipe Pereira- thank you for your input and the compliment.

Planning this way (and writing down my plans) is the only way my brain works :) Keeping things in my head doesn't work anymore, unfortunately :)

You also bring up an excellent hole in my plan; using equity vs cashflow to pay for college. I think it's one area I hadn't thought through, when structuring this whole thing, and your point makes total sense. Using cashflow should be the goal, not equity. This, in combination with @Jaysen Medhurst's excellent point (taking 10 - 15 yr loans is not the best idea, no buffer to fall on) makes me re-think the plan in a different way...

I'm thinking what I probably need to do is:

- Start with value-add investments in Class B multi-families on 30-yr notes asap

- Goal is to move up to $1MM+ properties, to utilize cashflow for college education & retirement in 8 - 10 yrs, just as the kids are hitting college age

Fallback is, of course, to use student loans in case of any bottle necks that are faced. On the longer run, the bottle necks & cashflow coming from properties should work themselves out.

Does this seem to cover everything you guys mentioned?

Thanks again for running through my crazy plans guys - truely appreciate it

P.S - When the world goes back to normal, I would really appreciate it if you guys would accept a humble invite to drinks/lunch/whatever as a token of gratitude.

Thank you for your input @Jaysen Medhurst,

you also provided excellent input to my other thread from a few weeks ago :)

I have thought about repaying my bad debts using a HELOC. I've done a bit of reading about this previously and the lower interest will mean I can pay it down sooner. It's bringing my credit score down to the early 700s because of high utilization (I have excellent payment history though). This is why I want to pay it off first, so I can boost my score (and my financial position) to be able to invest comfortably.

I agree with you that buying a 1.2 - 1.5MM multifamily makes sense in my case, because of the equity I'd like to build. It's definitely where I'm going with this my real estate investment plan. Should things work out, buying 1 - 5MM Class B properties is where my bread-and-butter should be.

I also agree that college will not necessarily cost 300K each due to inflation, . It's just nice round figure that I can use to help put a plan together (they're going to have to aim for these scholarships, if they want good schools! :) )

The challenge right now is coming up with the capital to buy a 1.2 - 1.5MM multifamily out the gate. 

I can probably raise about 100K now using the equity that I've built so far, that's why I'm trying to piece-meal it by buying several smaller multi-family houses. Once I have enough equity, moving into the larger 1 - 5MM properties because of the multitude of advantages they present. 

If there's an angle that I'm not seeing here, I would appreciate it if you could help point it out. As far as I've read here and elsewhere, the plan that I've posted above seems to be the most logical for my current situation.

Completely off topic here, but after the whole virus thing blows over, if you're ever in the area, I'd love to buy you a drink sometime

Thanks again for taking the time to reply to the posts
Amr

Hi everyone,

Long-time lurker here, like many people Rich Dad Poor Dad got me hooked on RE over 15 years ago.

Unfortunately, I never put my plans into action.

As the title suggests, I'm planning on using the BRRR investment strategy in multifamily properties.

Here's how I plan to execute my strategy:

- Currently in the process of paying down some bad debts that we've accumulated, unfortunately.

- HELOC of around $50-70K will unlock capital to start investing

- First 3 houses will be bought with the aim of paying down my kids' colleges:

     . House 1: Budget 300K - 10-yr mortgage

. No extra cashflow expected, goal is to build equity in the property to get son 1 to college with HELOC on equity in the property. He is currently 10 yrs old

          . Timeline: As soon as debts are paid off (around 18 months to 2 yrs from now)

     . House 2: Budget 300K - 10-yr mortgage

. No extra cashflow expected, goal is to build equity in the property to get son 2 to college with HELOC on equity in the property. He is currently 7 yrs old

          . Timeline: 1 - 2 yrs after House 1

     . House 3: Budget 300K - 15-yr mortgage

          . Goal is to get daughter into college. She is currently 3 yrs old

          . Timeline: 2 - 3 yrs after House 2

The idea is to spread this over time, allowing me to save some money and use the HELOC amount over and over again, to attain and keep properties

You will also notice that I'm assuming that their college tuition will cost 300K each. There's no telling of course how much it'll cost in 8, 10 or 15 years. Some forecasts say it'll continue to rise like it has in the past 10 years. Other forecasts say it'll fall. I'm assuming a marginal increase over the current rates, and anything extra can be financed via student loans.

After the first 3 houses:

My plan is to keep executing the same strategy over and over again with 15 - 20 yr mortgages to keep those properties to fund our retirement. Goal here is different, with some cashflow planned, to keep the ball rolling.

I'm currently 37 years old, and plan on working full-time throughout this process.

I'm quite handy, so will be doing some of the BRRRR work, but not all of it.

Where are the holes in this strategy, or are what details am I missing?

Do you see a better, more efficient way of achieving the same goals?

Thanks @Jaysen
I appreciate you replying to my questions.

About Scott's meet-ups, I've been to 2 or 3 of the meets and they've all been great! Scott himself was a pleasure to meet in person, sharing his experience and ensuring everyone has an opportunity to ask questions and get valuable answers in their journey. Very informative meets and great potential for meeting other investors. Definitely planning on joining them on a regular basis once I'm done with the debt pay-off phase 

Thanks again!

Amr

Hi guys,

Been lurking on the forums for a few years now, studying and reading while I payoff rash decisions made years ago (credit cards!)

I'm a fan of using the BRRR method, in acquiring & keeping rental property for years.

My question is, in BRRR, when you pull out your equity to buy the next property, do you factor the cost of HELOC repayment into your initial deal analysis?

My view is, if I want the property to have positive cashflow, I want it positive even after 'seasoning' ends and I pull my capital out of it .

Am I right? Or, is there something I'm missing?

If you do factor HELOC costs in, what's your method?

And do you plan to re-pay the HELOC in the first 10 years? Or do you plan on re-paying it over a longer term?

Would love to hear your thoughts, please.