All Forum Posts by: Jimmy Woodard

@Danny Mittler I'll come at this from a different angle since BRRRR might be different than what you're thinking it is. The idea isn't to get an FHA loan to house hack, it's to find an off-market property that you can rehab and then rent out to a long-term tenant or use as a STR on the backend (highly recommend the latter). An FHA loan isn't going to help you, hard money or private lenders will help you finance a BRRRR property.

With $30k saved, you're probably looking at a purchase price around $120-150k max. Certainly possible in cheaper markets like Florida, just might take some digging to find. A local contractor is going to help you with the rehab, but if this is your first project I would recommend partnering with someone who has done fix n flips before so you don't get caught off guard.

Once the project is complete, you need to find a lender who will do a cash-out refinance for the property. As long as you qualify (I don't know enough about your background to say either way), the goal is to find a lender who will lend at least 75% of the ARV as a cash-out refi. Some lenders have seasoning requirements (meaning you have to rent it out for a certain amount of time), other lenders like Better.com could care less.

It is a myth to think you'll get all of your cash back in a refi, but even if you have some cash left over after paying back the hard money/private lender that's still a win. If the market supports it, again I'd recommend doing a short-term rental to achieve a higher cash-on-cash return. Otherwise if you want more stability and less headaches, find a long-term tenant that can cover your loan payments. 

Good luck and hope you land that first BRRRR!

@Sean Starkey reserve $40k of the $190k for renovations to the property. A lot of people make the mistake thinking that if you list it guests will come easily, but the top STRs know how to stand out from the crowd. With $150k down you can afford most markets, but the key is to find one that will produce at least a 15% cash on cash return for your $190k investment ($28.5k/yr in cash flow). Happy to share some more thoughts if you'd like, so feel free to DM me. Good luck!

@Emily Mitchell there are other CA markets that might be a better fit and achieve a higher cash flow than Big Bear. Plus you don't need a management company whether your STR is in state or out-of-state, you just need the right systems in place. Feel free to DM me for more info!

@James Phan Henderson and North Las Vegas allow non-owner occupied (NOO) STRs as long as you're 1,000 ft from another permitted STR. Las Vegas does not allow NOO STRs, but you can either house hack (owner-occupied) or do 30-day+ rentals as you suggested. Good luck and DM me if you have any questions!

@Alex Contreras happy to chat over the phone. Feel free to DM me!

@Dan MacDonald if only, I'd pay good money for that service! It's not hard to find this information, but unfortunately it's just time-consuming google searches for "[county name] short term rental laws" or "[city name] short term rental laws" for markets you're considering. Good luck!

@Michael Lewicki as the saying goes, it's better to have it and not need it than need it and not have it. Especially if you plan to scale up your business and bring in business partners. 

@Lorraine Molina even in a saturated market, you can do research on comps (Airdna and Rabbu) and figure out what renovations to invest in so you can stand out. I'd highly recommend self-managing, it's not as hard as you think and you can avoid paying a 25% management fee. Good luck and DM me if you have any questions!

@Joe S. Rabbu is another great tool for this question.

@Wilson Vanhook there are dozens of cities across the country that can produce a good return when it comes to STRs. The questions you need to ask yourself are (1) what cash on cash return do I want? (2) what can I afford? (3) do I want to invest in-state or out-of-state? (4) Am I comfortable investing in a saturated market with my first STR? (5) Do I want to manage myself for higher returns or hand it off to a property manager who will take 25-40% of your gross revenue?

Good luck and DM me if you have any questions!