All Forum Posts by: Andrew Webber

@Lynne Garris I just listened to the podcast episode on this and it helps to look at it with numbers (in my opinion but I am a numbers guy). Essentially the plan is Buy, Renovate, Rent, Refiance, and Repeat. 

Step 1: Buy a distressed property - example price of $60,000K

Step 2: Renovate the property, often replacing major componentes like the roof, HVAC, do a SERIOUS renovation here (not a requirement but the more you do the less work/maintenance you will have to do in the near future). This is how you add as much equity as you are going to need for the next steps to work. Say $30,000K for example. 

Step 3: Rent out the property - source of passive income - even if it is small your plan is to hold and you have low expenses becasue of the last step. Rent> cost of monthly mortgage

Step 4: Refiance - you have invested $90,000 total and when you get the property reappraised you want the new value to be minimum worth investment/.75. So you want your investment to have been maximum 75% of the NEW value of the home. In this case $120,000. You are going to take a loan of 75% of the new value of the home - therein getting your ENTIRE investment back.

Step 5: Repeat! You put in 75% to buy a completely renovated house, have a tenant paying your mortgage, and now you use that same $90,000 to buy another house. And just keep repeating until you dont want to anymore and you can buy *"unlimited"* houses with that same $90,000. 

Now these are the VERY simplified steps and there's a lot to consider in here that I did not type out.