All Forum Posts by: Christopher Parsons

@Kyle Curtin I go through Mark Kohler's firm for both tax and legal. Mark has great free content on YouTube and talks about things your CPA should know/should be doing, whether you go through his firm or not. I'd at least check out his videos so you get an idea of questions you should be asking a CPA prior to working with them.

@Scott Lepore I think its like anything in life. When you have what you believe the best way to do something, you're going to paint it in the best light possible. Now, listening to Brandon and David and reading their stuff, they do emphasize a lot that not every deal will be a home run and that base hits are what wins a game.

That said, I would love have 290k a year or more out of my own pocket to invest, and I plan on getting there. Part of it is you have to take their other advice to heart too. Make your 5 to 10 year game plan and work backwards. We set a goal to get 1 BRRRR done this year (we started in July) with 30k. We're now starting on our 2nd one. By the time we refinance both deals that 30k will be about 40k to 45k. Maybe that means we can do 3 next year, or if we can get them done quick enough, up to 6. I think the main take away is giving you an idea of where you can go and how you can compound your investment if you have a minimum goal for what your profit will be from a cash out refi. Mine is $2,500 a BRRRR for now, and will probably be higher after I get more experience and gain efficiencies.

I do agree that there are factors they don't tend to mention, like if you go hard money and include the rehab into the loan, most lenders have you pay for the rehab or part of the rehab out of pocket, then reimburse you. Also, if you're not finding the deals yourself, having a deal finder. We got lucky and found an awesome wholesaler where we're investing.

Anyways, thats my 2 cents. In all, when you hear about BRRRR, you do tend to hear best case scenario. But thats the same as listening to flippers talk about how they made 100k+ on a deal and everyone expects it to be that profitable when in reality you have markets where 20k is average and other markets where 50k might be average. Its all in educating yourself and doing your due diligence.

@Javier Kaufmann turnkeys are great if you can find a reliable seller for turnkeys and if you're looking to be very hands off. The advantage of BRRRR, as I'm sure you know, is that you can recoup your money and do it again. But, you will have to put a little more work and effort in. An advantage is you know what was fixed on a property. The disadvantage of a turnkey is you're hoping someone else fixed all major issues on a property and that they didn't just paint a pig.

My wife and I are looking into Rent to retirement, Brandon Turner advertises for them all the time. We plan to BRRRR, flip, and wholesale for our actual income then self direct our IRAs to purchase turnkey. That way we work for our money upfront and our retirement money sits and grows.

@Alyssa Czopor Propelio Academy has a free course on Vacation rentals. Some other things you might have to consider is taxes. Normal rentals pay little to no taxes whereas vacation rentals tend to be standard income, so you will be taxed more on your income. Granted, you have the potential to make more on a vacation rental. Another thing to watch out for though is the situation we're in from Corona. We're seeing savings at an all time high right now because Americans are worried about the future. You also have people traveling a lot less do to fears, which in turn will effect the travel industry altogether. That could result in either it will be difficult to keep your property occupied since people aren't vacationing too much or, if you're lucky, a lot of hotels and vacation rentals in that area go under, so your competition shrinks. Plus, what happens if this virus comes back around.

Its great that your excited about this, my wife and I want to do vacation rentals too. But we're looking at building up a solid rental and hopefully self storage portfolio so we have a solid base in case vacation rentals aren't as profitable as we hope. Do your research, look at your game plan and try to hedge yourself for worst case scenario. Most importantly, don't give up the dream!

@Jamie Kammers maybe try to think of your fears from a different angle. You mentioned you passed a few deals because you were worried or afraid. Part of that fear I'm sure is a fear of your analysis being wrong and you wind up losing money, which is a reasonable fear. For me though, I'm afraid of missing a good opportunity. Now, obviously I don't mean go after everything that looks even half way decent. I just mean you should be more afraid of not jumping in when you find a great deal than of the deal itself. Most investors tend to lose a little on their first deal due to inexperience, but a few things I've either learned personally or through someone who has been there.

1. When you analyze, look at expected numbers and worst case numbers. That way you're in a better situation should things go south, and if things are better than expected you have a nice little bonus.

2. Base hits win a baseball game, not home runs.

3. Real estate is a rather forgiving investment compared to other vehicles. Let's say your numbers come back when all is said and done and you're cashflowing negative $50. Rents raise every year which means that property will eventually cash flow, and might even cash flow big with the upcoming recession/depression we're probably going to see. Also depends on the market your buying in.

4. After you get the first one out of the way, future deals become easier. Again, don't just jump into something for the sake of jumping. Make sure it hits the numbers you want.

5. If you're doing any sort of rehab, make sure your first one is an easier rehab and not a full gut rehab.

6. Never stop learning. My friend said it best about real estate investing, "You either pay to learn through personal experience or through education." I make it a daily habit to either read, listen to a book, or listen to a podcast for at least an hour.

7. Don't be afraid to ask for help. My wife and I finished our first BRRRR about 2 months ago and already jumping into our second one. With both of them, we reached out to my mentor and other investors to get more eyes on our numbers. BiggerPockets is an awesome community, you can always make a post here if you want more pairs of eyes looking over your numbers.

Hope this helps!

@Abraham Cisneros anytime brotha, just make sure to send me your list of deals when you get that together. I'm a small fry at the moment, but plan on blowing up in the next few years here. 

Thank you so much for the support, I really do love this community. Looking forward to see you all as we all grow together.

Hey everyone,
Chris here, started a new YouTube channel (DomesticatedDaddy) featuring a few of my interests in kind of a Vlog format and one of the topics is Real Estate investing. My wife and I are about to be closing on our first BRRRR deal here and are looking to try to finish out 2 more long distance BRRRRs by the end of the year as well as working some wholesale/ Fix and Flips in our local market (Seattle area). I am dedicating 1 day a week to the progression of our investment as well as just general investing info I've learned from various resources. I'll also be discussing what its like to be a stay at home parent who is trying to make their way into the world of entrepreneurs. If this sounds interesting to you, make sure to check out my channel - DomesticatedDaddy- leave some likes and comments, and subscribe for future content.

So, after reviewing everyones input, here's the plan and I am open to suggestions. I have a LLC set up for where I am investing in Texas. This first deal will hopefully be done and over with by the end of July. Assuming things go well, we're going to work with our wholeseller again and try to finish out 2 other deals in that area by the end of the year. We're getting all the loans under my wife's name, and after we refi, we'll deed them over to the LLC just for a little asset protection. Since we have USAA, we'll probably be opening a business account through them for the LLC. From there, we'll save up 20k as reserves for Cap Ex, then anything above the 20k in the account we'll use to reinvest in further projects. I figure if I run into a situation where I have to pay more than 20k for a major repair(s), then I can look into pulling out a business line of credit through the LLC as a worst case scenario (assuming the LLC has been in business long enough).

After we scale up (planning on trying to do 6 BRRRs next year, along with a note or 2), we'll be planning about 7k per property in emergency reserves and allow ourselves to dip into half that amount only if we need to on further investments as long as we're willing to hit it hard and replace that money ASAP. 

Great advice everyone, thank you so much. I really appreciate the information and have a better idea of what I will be implementing going forward.