There are over 3000 Realtors between the Hendersonville and Asheville Boards of Realtors. This isn't counting the non-Realtor licensed real estate agents. It's important to work with someone who can help you reach your goals- and perhaps more importantly, someone who understands them.
Many real estate agents don't own their own home, let alone investment properties. They have no clue. Say BRRR to them and they'll agree that it's getting a bit chilly.
"Properties" don't allow for cash flow. The math of the deal does.
If you want BRRR to be your strategy, look at the math and figure out how to make that work for you.
You mention that you're pre-approved for $155k. How are you going to pay for the renovation part of BRRR? Based on your statement about the 3% downpayment, I'm left assuming you don't have the money for that currently.
Have you looked at loan products that cover renovation costs?
Have you researched any other loan products that may help you reach your goals? Has the real estate agent that has been helpful been able to work through some of these questions with you? Have they introduced you to a lender who may have different loan products that can help you reach your goals? Or at least, discuss them so that you can make an informed decision?
At time of me posting this, according to Google Maps, Mars Hill is a 21 minute drive to Asheville. Fletcher is also a 21 minute drive to Asheville. There's been lots of growth and planned growth in the areas I mentioned in my previous post. I suspect we'll see even more as Asheville continues to burst at the seams. I firmly believe people can only consistently time the market in one way. That's not waiting for a "crash". It's buying before the "boom".
I do believe there are still deals to find in Asheville. Some challenges you're working against are:
- -a budget of $155k and low or no money for renovations
- -Institutional investors with deep pockets
- -an inflated market with lots of demand
There are (at time of this posting) 9 Coming Soon or Active single family homes in Asheville under $155k. 3 of them are mobile homes. There are some FSBOs and likely "off market" deals if you find them.
What would I recommend to someone in your situation- if I'm understanding your goals correctly?
Buy a home in your budget that needs a facelift. Something that is scaring most buyers off. Needs new paint, updates, curb appeal, new flooring, new appliances. Live there for 1-2 years while you do these things yourself as you have time and money available. Repeat. *I don't believe you'll find this in west asheville.
A problem with BRRRing for many people is the debt to income ratio. You can get a renter in your place and you buy a new primary residence, but for most loans (aside from only a VA loan to my knowledge) you have to wait 2 years to start counting the rental income towards your debt to income ratio. BRRRing tends to be done with a cash purchase and a refi after repairs. The model isn't necessarily for primary residences or cash strapped investors (though it can work and there are plenty of success stories that prove it).
This takes us to your question about doing a cash out refi and what you may qualify for. I'm not a lender. I would absolutely refer to my lender partner instead of answer this if a client asked. However, I believe the answer is something close to- 1) You'd have to leave 20% equity in the home. 2) You need to qualify for the new loan- whatever amount that may be. The qualification is going to consider your credit score, work history, verifiable income, debt to income ratio, and loan type.
You're on the right track. You're asking good questions. You've taken more action than I assume the majority on Bigger Pockets has- you've gotten pre-approved. Now keep an eye out for that property that fits your needs and helps you reach your goals. Keep looking in West Asheville- and also elsewhere.
