All Forum Posts by: Christopher Silich

I have $135k in equity in my primary residence. I recently saw a SFR 3/2 deal at $99k cash, $10-15k rehab, $134k ARV, $1095/mo rent. Just an ok deal. But it got me thinking about my ability to do a refi or a heloc to get the cash needed to buy a house like this. In the example above, the equity in my primary would be enough to buy the house with cash.After rehab and after getting an 80% mortgage on the new house, I'd end up with almost all the cash back out, and could pay off the heloc or pay the mortgage back down to its prior level right away. On a better deal, I could even end up with extra cash. Is there something I'm missing that makes this a bad idea?

Wow, those are some fantastic rent/value ratios. Is that because of your good location or should I forget single families and go multi?

Are you talking >4 units? Banks refinance SF homes and small multifamily units (<4 doors) based on comps, not income.

Originally posted by @Berny Petersen:

@Christopher Silich Hi Christopher, thanks for the welcome. Congrats on getting the funds together for your first BRRRR. That is an awesome strategy to follow. You're on the right track with a defined time line in your goal. Too often we just say "ASAP" as our goal, and it never gets done. It really helps me to be as specific as possible when setting a goal. (you might do all this already)

What do I want to buy? If SFR - how many beds, baths, etc. Ranch or 2 story, basement or crawl...

Where do I want to buy it? Very specific here, almost down to the street. Zips and cities are too broad a stroke and wildly varied in Atlanta.

When do I want to buy it? Looks like you have this part down...

How am I going to buy it? Are you going for a conforming loan? Got the lender picked out and pre-approved?

As far as finding deals, that's where it really gets fun! MLS, wholesalers, direct marketing, auctions, etc. No real secrets there, just a lot of work. Research them all and see what appeals to you and dive in. I find that there are lots of opportunities to buy, but are they deals? Get really good at crunching the numbers so you'll know a deal when you see it. When you see it, buy it!

Keep us posted ---

BernyP

What? Single Family, I've heard 3/2 is the most in demand rental. Makes sense– young families.

Where? Well, for a first time BRRR I'd like to be between home (Lawrenceville) and work (S Buckhead) so I suppose anywhere ITP, North, North-Eastern, and Eastern suburbs.

When? We're setting all extra cash aside. As soon as we have emergency fund + downpayment + repair fund, I'll start the hunt. I might try to time it with one of my breaks (3 weeks each in summer and winter) so I can focus on the rehab.

How? We have $130k in equity in the house, and as I said, we're saving for the rest. The plan is to use a HELOC, then do all the BRRRing, which should leave 20% of the ARV tied up in equity (the downpayment I mentioned saving for), and the rest goes back to pay off the HELOC. Do I have that right? Sometimes I feel like I'm missing something huge in this BRRRR strategy, as "more cash than you started with" plus "a renter buying you a house" sounds too good to be true.

Finding deals? I was about to start looking for wholesalers, because auctions have too many unknowns, and I don't have the MLS as I'm not a realtor.

I feel like I'm filling up your welcome thread with all my questions. I'd love to start an email or BP private message conversation instead.

Oops, sorry, Berny autocorrected to Bernie.

Hey Bernie, Welcome to Bigger Pockets. I'm almost done saving enough cash for the down payment and rehab costs for my first BRRRR. Goal is to do it this year. Next step, find a house. Can I take you out for a lunch or something, and we can chat? I'm interested in how you find deals, and if you can share a GC or other recommendation. Thanks, Chris

I can answer that last part. Imagine you had a home you fully owned, free and clear. You could go to the bank and get a mortgage on it. Seems like a silly thing to do, right? Most people wouldn't turn a free and clear home into a mortgaged home. But if you did, the bank would basically take ownership of whatever percentage you tell them you want mortgages (they'll limit it to about 80%). So if it's a home worth 100k, and you got a mortgage on it, they give you 80k, you have 20k in equity, and you pay them back the 80k over then next 30 years, with interest. Now imagine a BRRRR. You buy a 50k house, put 25k into it, now it's worth 100k. Go get a mortgage on it, and you walk with 80k in cash, 20k in equity. And you started with 75k. Obviously I'm leaving out closing costs and lending fees, but you see the point and the power of it right?

I'm a web developer, and I do lots of freelance with Wordpress as the base framework. I make my own themes from scratch though, so I can't weigh in on premise themes. But any other questions- fire away.

Damir Kamber I'm just getting started in Lawrenceville, GA, and looking around the Greater Atlanta area. Right now I'm in that very first phase you mentioned- I'm looking for attorney and accountant recommendations. Care to share?

@Marvin Gunn just getting started, both as a parent and REI. I'm talking to Norada on Wednesday. I'll post about my findings.