All Forum Posts by: Andrea Castor

My husband and I are starting out with about the same amount of cash. After doing our research we would like to pursue the BRRRR strategy slowly, buying 2 properties a year and one yr 5 we'll start selling 2 a year, thereby making a good $100kish income a year with fairly low risk. That way we can both work part time jobs and spend more time as a family.

Our first step was finding a great realtor, and getting an email set up so when anything hit the market within our search criteria we could look at it within the first day on the market. We would run the numbers and if it worked, we'd make an offer. We've lost out on a lot to higher bidders, but if its not meant to be, well, its not meant to be.

We are finally in the works on property #2. Lots of potential renter interest and even had a few interested in buying. We have talked with the small local bank on other prop is financed through and they said we could use the cash to close, then refinance starting on Day 1 based on our track record and credit history. We may just flip and sell. We'll see how the cards play out....

Meanwhile, we are keeping our eye out for the next deal. I'd love a multiplex and one where we can use a property manager, but so far haven't seen any deals in the A/B/C+ neighborhoods I search...

Best of luck to you!

We are in the same position right now, with one, soon to be two properties under our belt. We'd like to form an LLC, and are looking in how to do this. We have a meeting with our CPA next week, but I was quickly told my another CPA friend that we want the LLC to be in one person's name, not both, for tax purposes. Not sure I fully understand why so I have to look into that further.....

We are in a similar situation where the suburb of Cincinnati we are trying to move into doesn't have a ton of houses for sale. Houses are selling within hours of being listed. I've started putting my feelers out for FSBO possibilities and came across a few leads. The most probable one was very clear they want no realtors involved because they like to do things on a personal level. Personally, I appreciate that. This will also be our primary residence.

So far we have been given a price. It's a little higher than I had hoped, but only because of my budget, I think the price is fair. We are doing a walk through in the next month after they do some remodeling (new paint, carpet, etc). If all goes well I plan on paying outright for an inspection. Assuming that all goes well we'll have a lawyer draw up a contract (which we also plan on paying for). I figure the appraisal will be done during the financing process so I'm not super worried.

We havent closed on the property yet. Cant sell something we dont own. so "offers" were verbal not of the contractual type. If I got $25k for doing nothing, heck ya my first option would be selling it! Just wasn't the original plan...

Thanks for elaborating. Im more than willing to be $2k away from the 70% rule for a place this easy. :)

I was really planning on renting but I've got two people interested in buying already when I listed for rent....crazy!

ok, I see what you are saying about it not being a true BRRRR deal because I'm leaving some of my own money in the deal. $2k, plus little closing costs (cash closing) is something Im perfectly fine with. It's an A+ neighborhood, needs just a good clean to be rentable (perfect since my husbands landscape business is about to go crazy for the season), and will rent fairly easy. I was also being fairly conservative as I could take out 80% of appraised, but the interest rate would be a little higher. I was just trying to repeat the 70% cash refi like we did on our other condo because the bank was totally open about that.

That being said, we are doing the BRRRR plan where on the 5th year you start selling 2 a year and buying 2 new per year. We will not put the $15k into it until then. Once remodeled the appraisal value will come back closer to $110k based on comps (although clearly those will change in 5 yrs). So I still believe it'll follow the 70% rule.

I am in the Dayton area and depending on exactly what you are looking for there has def been some deals popping up. Are you working with a local realtor? If not, I can highly suggest ours.

Have you looked at SFHing instead of multi-families? I personally am finding all the multis to be over priced but I mainly focus south of town.

I will say though that in general, yes, the taxes really hurt the cash flow on some deals.

@ Brent Coombs, I think I'm misunderstanding what you are saying...

Are you thinking we won't be able to find a cash out refi on a condo?

Comps right now are right around $96k when averaged in the complex, so that's why I stated $90k conservatively.

We plan to buy and hold for approx. 5 yrs. I do not foresee any reason to get a property manager during that time. Worse case scenario it would be 11% and we'd still be cash + $62/mo. We have experience in a nearby similar complex and typically see longer term tenants (empty nesters or young professionals).

As for the CapEx, I may be confused on this. Being that this is a condo, I figured the only expenses that would be covered under that would be windows, furnace and water heater, all of which should be fine in the next 5 yrs. I figured in the 5% for those just in case though to be conservative and I also find the 5% vacancy very conservative as well based on my experience.

Our offer got accepted on a short sale! I'm pretty excited because this is a condo complex I've wanted a rental in for years.

Purchase price: $65k

Rehab $15k (nothing upfront but a good clean) but eventually will rehab kitchen, two full bathrooms, replace carpet with laminate wood, sliding glass door to deck

ARV: $100k

Monthly rent: $1000/mo

Taxes:           ($192)

Insurance:     ($20)

HOA: ($196)

Maint 5%:       ($50)

Vac 5%:          ($50)

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NOI $492/mo

Cash on cash return $5,904/$65,000 = 9% return

In 6 mo, we plan to refi. Worse case appraises for $90k, pull 70% out ($63K).

NOI with new mortgage payment of $319/mo would be $173/mo (+~$85/mo in equity).

We do plan on managing our self so I did not include that in the numbers. We have another similar condo in the area and they are very easy to manage. Anything I'm missing before we close?