All Forum Posts by: Bryson Elder

Whats up Bryson! 

I'm also in Ohio. I've worked with many folks who choose to house-hack as their first step into the investing world, and that's what I'd suggest to you. Buy a duplex, live in one side, rent out the other, and use that rent to cover a chunk of your mortgage. When you're ready, you can move into a new place and rent out the unit you were living in. Doing it this way allows you to ease your way in and costs you less up front - down payment for an owner-occupied property is much lower than an investment property, you may qualify for down payment assistance and can even use funds as a gift from a family member if that's an option. 

The money needed to complete a BRRRR varies WIDELY from market to market. I don't think Ohio is considered to be an expensive market. So, I would be looking for ways to make BRRRR work for me.

Many people use hard money loans to do the initial purchase and rehab, but I believe those lenders typically want to lend to investors with experience because part of the criteria is evaluating the deal itself and the investors ability to execute.

In my experience a really good BRRRR can get you MORE money back upon a refi. So, if you can manage to find the money for even a SMALL BRRRR and execute it well your capital can increase to do slightly larger and larger projects as you complete each deal.

@Bryson Elder, debt is not something to be afraid of nor is it something to use willy nilly. Here are some things to consider.

1. Buy 1 house for $100k cash, it goes up 10%, you have $10k profit.

Now use the same $100k to buy a $500k house with a loan, it goes up 10%, you have $50k!!! That's 5x the profit with the same investment. This is why loans/credit in business is referred to as "leverage" it allows you to accomplish MORE with less.

2. Debt reduces certain kinds of risk. If you own a property outright and get sued that property can be foreclosed on to pay that judgement debt, but if it is fully leveraged with a loan it isn't worth them trying to foreclose on because there isn't enough equity to make it worth the effort and expense.

3. With regard to doing BRRRs and wanting to cash-flow after the refi. Rates are higher right now but the old adage is "Marry the property but date the rate". You will likely be able to refi again later lowering the rate and improving cash-flow. So, a decent deal is likely to get better over the long run.