All Forum Posts by: Anthony Phillips

I was wondering if any members on here have had success in markets that don't fit the destination/vacation type areas. For example I am located about 40 mins from Nashville Tennessee are people renting that far from a destination?  I am also about 3 1/2 hours from the smoky mountains are people using a short term rental as they drive to there next destination. I do see a few air bnb rentals in my areas and it looks like they are at about a 50% rented per month. With that being the case they wouldn't cash flow much more then my long term rentals in the area.

Another idea we have been thinking about is having a tiny house on our property. The only problem we have with that is we are on septic so we wouldn't be able to add it to the plumbing system. Are there pre made tiny houses set up on trailers that have plumbing systems systems similar to a camping trailer that i could take to the dump after a renter is done with there stay. I could purchase a plot of land and put it on that but think that cost of doing septic/water/and power would be pretty high for the returns we could get off the rental.

So I was wondering what sort of reserves everyone keeps on there properties. I know most people are saving a percentage of the rent for vacancies and cap ex. When you do get a property bought and rented are you keeping a set amount in cash for possible vacancies or repairs. For example a few months of the mortgage and some for a repair until those reserves are built up off of your cash flow. I plan on initially trying to keep 6 months of mortgage payments and a few thousand for a decent repair equaling about $15,000. I am wondering if that is too much or too little. Seems like a lot to be in an account and not working but on the other hand I will always have the safety of it being there.

Thanks yall!

If that's what the going rate is in Nashville I am saving myself alot of money self managing. Yah but he must be using some other metric of 30% other then monthly rent.

Quote from @Nathan Gesner:

And let me just say, I'm not bashing your investment. Good on you for taking the leap! I'm just encouraging you to continue your education and working towards better investments. One bad tenant can be devestating and sour you on real estate forever. Smart, cash flowing properties will protect you in difficult times, strengthen your resolve to invest more, and give you the financial returns to accelerate growth. 

I do plan on keeping a significant amount of cash on hand dedicated to that property for for up to 6 months of possible loss rent and repairs. So Nathan in my scenario would you have just flipped the house and find a better cash flowing house. The house would have cashed flowed better at the interest rates at the beginning of the year when I purchased the property. I bought the house all cash thinking that is was my first one and if it did take longer then expected I wouldn't be paying on a loan while the property was being rehabbed. Thanks for the response.

Quote from @Jason Brown:

@Anthony Phillips

If those rents are market rate then these numbers hit me more as a flip then a BRRRR. Take that 75K and move to the next. Props on getting all your money back though. I've BRRRR'd a few times and hasn't always been as clean as that😮

 How are you figuring out which property’s to brrrr and which ones to flip?

Thank you all for your replies. After the mortgage, taxes, and insurance the property will cash flow just over $125 a month. After the purchase I was on the fence about keeping the property and rent or flip the property. I like the area and think the property will keep on appreciating. I currently have a high paying w-2 job and my wife works as a 1099 for her business. I think  keeping the property even with the low cash flow would help me a lot with taxes at the end of the year. I plan on saving all the cash flow plus having a large amount of cash that would be used for any vacancies or repairs that would be needed. Also after the year lease I was going to see how the market is and 1031 possibly into something new. 

Purchased all cash and refi into a mortgage 

So I just completed my first Brrrr.

Purchased house- $235k

Rehab-15k

Appraised value- 325k

Currently rent- $1,950

Mortgage- $1,681

Cashed out $250,000

So I think I did a pretty good job for my first brrrr took a little longer then I wanted with contractor problems and delays. I will have all my initial investment back and the property is cash flowing. I just keep on getting the feeling I am leaving so much money (equity) on the table. I know this is a long term play when using the brrrr and not flipping.

Maybe some more experienced investors could give me some advice. I am currently a W-2 employee making good money. I also have my Real Estate license here in Tennessee. My goal is to try to transfer into being a full time real estate agent in 2 years and continue investing in real estate to hopefully make as much cash flow to pay my bills. This whole brrrr took me about 4-5 months to complete which I think with the proper contractors and plans in place could be cut down to maybe 3. That would only give me about 4 properties I could do in a year if I could find a deal that works. With only making the few hundred dollars and cash flow it will take me a long time to build up to the amount I needed to do real estate full time.

Any Advice from all you veterans of the Real Estate game that were in my shoes at one point??? Thanks guys

So I just completed my first Brrrr.

Purchased house- $235k

Rehab-15k

Appraised value- 325k

Currently rent- $1,950

Mortgage- $1,681

Cashed out $250,000

So I think I did a pretty good job for my first brrrr took a little longer then I wanted with contractor problems and delays. I will have all my initial investment back and the property is cash flowing. I just keep on getting the feeling I am leaving so much money (equity) on the table. I know this is a long term play when using the brrrr and not flipping.

Maybe some more experienced investors could give me some advice. I am currently a W-2 employee making good money. I also have my Real Estate license here in Tennessee. My goal is to try to transfer into being a full time real estate agent in 2 years and continue investing in real estate to hopefully make as much cash flow to pay my bills. This whole brrrr took me about 4-5 months to complete which I think with the proper contractors and plans in place could be cut down to maybe 3. That would only give me about 4 properties I could do in a year if I could find a deal that works. With only making the few hundred dollars and cash flow it will take me a long time to build up to the amount I needed to do real estate full time.

Any Advice from all you veterans of the Real Estate game that were in my shoes at one point??? Thanks guys

Whats up Austin I'm just east of you in Lebanon Tn. I just completed a brrrr out here in Wilson county. I'm also a local realtor and that 300-350k price range has been pretty hot this year. Just in this last couple months as the interest rates rise there has been some really good deals to be had lately. You are seeing alot of 5k-20k price drops depending on the house. I think to make your buy box work it is going to be a pretty significant rehab looking at 15k-25k on the rehab which would be really hard to find one that would qualify under FHA conditions. Do to the fact that FHA wont lend to something with that significant repairs needed. Will probably have to go conventional not sure if using the FHA is being used to have a lower down payment. Feel free to reach out if you want to talk real estate or would like to know more about the market this way.