All Forum Posts by: Hunter Nelson

@Andrew Postell That's a great point about the opportunity cost of the time it would take to find a BRRRR-able property. I need to do more thinking to figure out exactly what I want for my first home purchase, which--like I said in the other two replies I made--will be a house hack with at least one of my friends.

I will definitely explore first-time-homebuyer incentives! Thank you for the reply!

@Ben Rhodin thank you for responding to my post! I didn't make it clear enough in the original post, but my friend will be living with me, so it will be a house hack. 

That's a very interesting point about the price of the home making it harder to BRRRR properly; that's not something I would have considered, so I greatly appreciate the input! I'm willing to house hack for sure, and I do have a few friends who might be interested. I think if I can convince one more friend to rent from me I can live for basically free without having to do renovations. That's definitely something to keep in mind, and I sincerely appreciate you opening my mind to other opportunities!

I haven't officially decided what I want to do for my first investment property, which will also be my first home purchase. Thank you again, and I'll spend some more time thinking!

@Jason Wray thank you for responding to my post! What I mean is that I'll have a friend renting a room from me and I will be living there too, so it would be a house hack.

Hello everyone!

Is it pragmatic to do a live-in-BRRRR, house-hack deal starting with a conventional or an FHA loan on a primary residence? I've heard people talk about getting a hard money lender for this strategy, but I'm wondering what alternatives exist. I'll have a friend renting from me for a year or two.

I've ordered the BRRRR book from BiggerPockets, and I've listened to BP Episode 327 where they do a BRRRR deep dive where David softly advised against this (@ 1:19:48 in BP 327) because it wasn't efficient, but I wanna learn more and see if it would be a good-enough way to get into real estate for someone in my position.

I'm estimating that by the time I'm ready to buy--November 2022--I'll have $70,000 (not including my emergency fund) in cash for everything: cosmetic-only renovations, initial down payment, closing costs, etc. Additionally, I'll be debt-free by then.

I currently live in a suburb outside of Denver with my parents where real estate is quite expensive for entry-level homes. So, I had the idea of BRRRRing with a low down payment (3-5%) on a fixer-upper single-family home that only needs cosmetic updates. I'd learn how to do the renovations myself. Once the renovations are done and the house appraises for more, I'd proceed with the cash-out-refinance process.

If I'm understanding all of this correctly, I should be able to get a new loan at 75-80% of the new appraised value. This would avoid me paying PMI, and I'd be living for almost or totally free when accounting for the rent.

Does this sound like a reasonable plan? Am I understanding how this works correctly?