All Forum Posts by: Kevin Sha

@Kunle Akangbe

So after the cash out refinance of the first property, which property's rent pays for that refinance loan?

Hello,

I'm extremely dumb and am having trouble grasping the concept of the BRRRR strategy. Specifically where the money flows through each step and how it continues flowing after your first property. I don't mean 'cash flow'. I mean where does your initial monies go after making your first purchase and how does it get recycled and paid off.

Is there a flow chart or some sort that I can look at that details this?

@Derek Diamond

Thank you so much! I guess the biggest first hurdle is saving up for the down payment + repairs for that first property and actually finding a good deal.

My parents never really focused on them so I don't think the properties have been utilized to their full potential. The properties have been rented out at below market and I don't know the specific numbers yet but they probably have not been cash flowing very well if that's the case. I honestly forgot they even had the two properties. I started getting interested in REI just recently and they suddenly popped into my head and after reading and listening to some podcasts it occurred to me my family has probably not done a very good job moneywise with the properties. So now I'd like to see what I can do to help them out! I think first I need to figure out the exact numbers with the properties and see how well they're doing.

Do you mean by a cash out refinance?

My parent's bought two condos in Orlando, FL maybe 10 years ago for around 60k-70k each. They're fully paid off and have tenants in them. The value now for each is probably $100k+. I don't know all the numbers fully yet. But my parents haven't really done anything more with them.

I want to help them get to the next level. But we are all essentially newbies to REI. I will do my best to use this as a learning experience and get myself into the game while helping my parents.

What do you guys suggest is the best way to use the 2 condos to expand and buy more property?

Newbie here. I've consumed maybe too much podcasts/blogs in the last week or so but it's always about landing the first deal and then it's supposed to get easier from there. So that's the part I'm getting stuck at and maybe not seeing the big picture yet.

If my goal is to first purchase a small multi-family to live in and rent the other spaces out. How does that first property really help me get to the next purchase quicker than the time it took for me to save up for the first property?

How do you turn that first property into 10...20...30 in just 5-10 years like I see in the titles of most podcasts?

I definitely still lack a lot of knowledge which is why this is confusing me so I'm hoping someone could help my pea brain out

I think both properties were bought at around $60-70k not too long after the recession back in 07/08. Someone is offering to purchase 1 property for ~150k.

I forgot to mention my parents wanted to sell and buy a different property. But I'm thinking why go through all that again when you've already paid off the current mortgages, right?

My parents bought 2 condo/townhomes a few years ago. I didn't know this until now but they've already paid off the mortgages for both properties maybe 5 years ago. But they just said they are thinking about selling them because they haven't earned much due to having to fix a lot of stuff each year. So all in all maybe they've netted $8k from the twp properties over the last few years. They just did some major AC repairs last year and I'm thinking they should hold on to them. I feel like they've finally fixed stuff that were really problematic and expensive and that the expenses shouldn't be too random and large for a while.

1st property is rented out for $1,400 with ~$500 in recurring monthly expenses (agent fee, HOA, insurance, etc)

2nd property is rented out for $1,200 with ~$500 in recurring monthly expenses

Are these numbers good? I have no experience in real estate whatsoever. But I'm thinking since the mortgages are already paid off, this is basically free money they can use to put as a down payment for another property in the future? 

I think they are just getting fatigued with the maintenance expenses. I'm trying to be positive thinking that that should be over now since they've got it out of the way last year. Is this silly of me?