Hello all! First a little background info: I am a first time home buyer who's an aspiring REI. I want to purchase rentals and really like the idea of the BRRRR method. I would also be interested in flipping once I have experience and some systems set up, to provide additional cash flow. Currently, I rent and am eager to purchase my first house. I am tired of paying someone else's mortgage when I could be paying down my own. I've been pre-approved for both an FHA and USDA loan and I wanted to do a BRRRR even if it took us longer to fix it up while living in it. Also, unless I got approved for a personal line of credit or something similar, I wouldn't have much money upfront for rehab so the rehab would be done as we work and acquire money. The problem is, due to the current market conditions, everything is overpriced and there's not really much to choose from in my area (rural East TN). I know for BRRRR to work, you ~ideally~ don't want to pay more than 75% for the house and rehab... If you want to get all money back out. I feel that I should note, because it's my first property, I would be alright if I left a little bit of money in the deal... If it meant that I could just get the ball rolling.
So my question is, should I still consider doing a BRRR given the current market? Another thing I'm worried about is that after refinancing, interest rates will be back up, and I'll end up with a higher interest rate than I started out with.
Or, because of how the market is, would it make more sense to just get a property that we could do a little bit of cosmetic work to, and keep the original mortgage on the property instead of refinancing. Live in it, save save save for a few years, then use savings to get property number two? I currently work at Walmart and do not make very much. I am also attending college to get a degree to become an HR manager.
Any advice would be appreciated, thanks so much!
