Quote from @Jeremy H.:
Hmmmmm...I got some for ya!
Favorite financing method on the BRRRRs?
Buying criteria/thresholds? What do you look for when you buy? Minimum CoC return? Minimum ROI? Minimum cashflow per door?
How do you find your deals? Favorite method to finding deals?
Do you plan any exit strategies?
Hi Jeremy (fantastic name btw).
We finance through a local lender with conventional loans.(70% LTV) So far so good and we’ve been very happy with that route. Eventually we’ll turn into our own bank and utilize cash more.
Generally we keep things very simple. Appreciation is cool, but it’s not always our go to when acquiring.
However, if we see an opportunity for value add / rehabs and with my background in RE as a Broker knowing the local markets, we jump on it and take advantage of the opportunity.
Basically we want our cash flow or future cash flow to cover everything. (Debt Service, Maintenance, Utilities, Vacancy, etc). We mitigate risk by building in a 25% Vacancy into our numbers and thus far, it’s proven to work well especially since we rarely have vacancies except when we turn/rehab a unit. It also helps for the unforeseen (water heaters, flushed baby wipes clogging pipes, evictions, etc). On average, each door cash flows $350/Month for us.
We’re in this for the long run so slow and go is where we want to be/ we want it to be as boring as possible.
We’ve actually sourced all of our deals via the MLS thus far, minus one off market via a family friend.
Exit Strategy; we’ll hold for long term and continue to keep the machine moving smoothly and appropriately. We’re not opposed to selling off some if need be for bigger and better but ideally we’d rather acquire more. If someone ever came offering an adequate number for our portfolio, we could possibly bite, but otherwise we’re fine with holding.
Great questions / thank you!
