All Forum Posts by: Curtis Brown

Hello everyone!

I'm considering moving out of my house and turning it into a rental. Based on my research I think I can get about $2400 - $2600 monthly rent with a monthly expense of $2139.28 (that's including mortgage and saving for things like capex, repairs & maintenance, etc.). I'm wondering if it's worth turning my current home into a rental since it's the only one I'll have for many years (most likely). Any thoughts? 

Additionally, a lot of experts are saying the real estate market (among other markets) is going to have a significant correct soon. In terms of home buying, I think I should wait to see what happens this winter and decide if I am going to do this. I am also aware that mortgage rates are going up while the prices are expected to go down so it might not feel like a good deal from a monthly-mortgage payment standpoint. What do you guys think?

Thanks for any perspective you can share. 

Thanks Brad. Very helpful information. I have a couple more questions, if I may. Regarding Debt Coverage Ratio (DCR) in my case, I take it 1.24 isn't so good? Also, I see that it lists DCR as follows 0.00/1.24. What is the difference between the two numbers and why does that matter? Is the way to improve this ratio to either reduce expenses or increase rent or both? Also, does ARV based on cap rate simply mean the difference between purchase price and ARV? Thanks again.

This is my first BRRRR calculator analysis and I'm scratching my head on a couple of things. I've listed my major questions below. Any other insight shared will be greatly appreciated. Thanks!

- How is the pro format cap rate calculated?

- What is debt coverage ratio and why is it important?

- Why is gross rent multiplier important?

View report

*This link comes directly from our calculators, based on information input by the member who posted.

Nick,

All good points. One risk I see with having all my cash in equity is me not BRRRR'ing correctly (i.e. my ARV doesn't appraise well and my cash out refinance doesn't cover all of my costs). My concern is I'll have a balance on my HELOC that I won't be able to paid off immediately. If I have my cash on hand and my cash out refi doesn't recover all of my costs, then I'm not stuck paying interest on the credit balance.

Also, HELOCs don't typically allow people to borrow against 100% of their equity. This could my options in terms of homes I could afford. What are your thoughts?

Thanks! @Jaysen Medhurst

Is this group still in existence? I live in St. Mary's and am interested in getting plugged in. Thanks. @Steve Cavanaugh

I'm just starting out in my real estate investor journey and have been learning all I can from various books, podcasts, and people. My wife and I have a 30-year fixed-rate (2.87%) VA mortgage with about $80k in equity. We recently applied for a HELOC and, if approved, will have an $80K line of credit. The processing time for our HELOC is going to be about 90-days and the lender said our credit line can go up if we put more equity in our home before closing. We also have roughly $64k in cash (it's parked in a high-interest savings account). I am thinking about putting the $64k into the principle of our current mortgage to increase our HELOC to about $144k prior to closing - this would make the HELOC our only means to invest with. The appeal to this approach is we will be able to pay off our mortgage in 11 years versus 30 years and save over $30k in interest. The real estate investment method I'm leaning toward is BRRRR but I am open to finding good deals on homes that need minimal effort to become rent ready. Do you see any drawbacks to putting all of our cash into our mortgage and relying solely on our HELOC to get started in real estate investing? Thanks in advance!