All Forum Posts by: Mary Baccellieri

Hi everyone :) someone may have already asked this question so please link the thread below if so.

What is the best way to finance a BRRRR in your opinion? HML? Private money?

I was leaning more towards HML but I'm worried about not having the required personal funds to use it to pay for: points, interest and origination fees. Does someone have a ratio perhaps of if they are borrowing X amount from a HML, they make sure they have Y amount in their own cash reserves to account for these costs? (On top of whatever % LTV they need to pay to use HML in the first place).

@David Thomas

Thank you for the input! I agree that I am at an advantage in terms of time because it’s really a matter of when I want to move- hopefully soon (in about a year) but can be longer if need be. I am going to keep an eye on the markets in the area. Looking to move somewhere in Monmouth County- Hazlet, Middletown, Red Bank or Aberdeen-Matawan are my top choices. The rental market here is definitely not the same as NYC so that is something to consider. I like the idea of single family rental- less tenants, less turnover.

@Mark F.

Awesome! Thanks for the link and for your insights. Much appreciated

@Mark F.

Yep! Exactly. The construction is very much worth it to me because you get a brand new house basically and with a lower mortgage (after re-fi) compared to a nice house bought with a conventional loan. On top of that, getting all your money out of the deal after the re-fi to do it again. It's an amazing concept. I will have to do more research on HML and what to look for when analyzing a deal. I believe that's the route I will have to go until I can build a strong enough portfolio and make the personal connections needed to use private money lenders. Are the zoom calls open to anyone to attend?

@Mark F.

Haha! What do you look for in a property before you invest? Not sure if I should buy a total mess and fix it up entirely and reappraise or buy something livable and just rent it out as is?

@Mark F.

Haha! Good to know. I like the idea of living in something for a year first to take advantage of the low down payments and then renting it out and acquiring another property the same way. So many different options out there and that’s what makes real estate investing so great but also overwhelming about deciding what’s the best strategy!

@Jonathan Greene

Thanks for your response! I really love the idea of the BRRRR strategy but I am a bit intimated by the hard-money lender idea. I could wait a year or two to move and build more equity in my house and use my HELOC. I did an FHA streamline re-fi (so I still have an FHA mortgage) which lowered my monthly payments by $900 and I paid no closing costs (offset by FHA incentives). I wouldn't mind house hacking again but I can't use an FHA on a second property. Because of that, I would have to use a conventional loan, which would require more cash on hand because of the larger down payment. I like the idea of the condo but don't like HOAs. I think my preferred route would be a BRRRR multi family (+ a house hack) but again, just a bit scared to take the step to working with hard money lenders. Do you have any advice on how to approach that?

Hi everyone. I began house hacking a 4-unit property in NYC last year. After refinancing recently, my cash flows are about + $700/month (while still living in the property). I am looking to move closer to my parents in NJ relatively soon and still want to continue to make smart real estate investment moves. I am planning to keep the 4-unit property but not sure what my next strategy should be especially with so many options out there. I also don’t have much saved up right now because I recently rehabbed an apartment in my building. Any advice??

@Brandon Coleman

If you are currently still living with your parents or renting, I would say house hacking is the best first step. I house hacked a 4-unit property in NYC (pricey market!) with an FHA loan. I was paying about $300/month after rental incomes in and operating expenses out- not many people can say they live in NYC for that cheap. Refinanced recently (without having to pay closing costs again because of FHA incentives) and now I'm actually earning $700 per month. This is also while building equity in the property. If you live in an area where you can't build equity that quickly, focus on buying something where you can at least pay minimal money to live or possibly even make money each month (cash flows). Best of luck !