All Forum Posts by: Russell W.

I'm hoping to further my understanding using the brrrr strategy from a numbers perspective and explain my current situation.  

Bringing all cash limits my buying power for the properties I'd like to get into which are multifamily units.  I've read others have obtained a loan at 20-25% which may or may not include rehab costs factored into the loan.  If the rehab costs are not included, the buyer funds it themselves.  

Typically using all your own cash, at time of refinancing if your arv is 70-75% of your acquisition price plus rehab costs you would get all your initial investment back. 

In this hypothetical all cash scenario my understanding is that your cash out refi would get your entire acquisition + rehab investment back:

ARV: 250k
Purchase Price: 170k
Rehab Costs: 17.5k
After cash out refi: 185,500 is retrieved to use on next property (75% LTV)

Now if I was to put  20% down on this same property instead of bringing the full purchase price to the table how does this affect my "After cash out refi" amount? (Let's assume that I am providing the rehab costs)

One question I have is regarding the "seasoning" period.  What do the finances look like during this time vs after the cash out refi? Is cash flow affected and what is the typical cost involved in the refinance?

 I have quite a bit of equity in my current home (140k) I could use to fund my first deal.  I would assume I am to treat this money as "cash" which then is retrieved if a 75% LTV is achieved, is that correct?  Until the cash out refi are you using the monthly cash flow to pay back the home equity loan?  It makes me nervous taking a home equity loan since it affects my current residence and ultimately my family.  It feels safer to use money I have saved specifically for investing but obviously using a home equity loan would give me much more leverage  .   I appreciate your help and insight!

@George Despotopoulos - thanks for the website referral, I'll definitely check that out. 
I am so used to the typical forum culture of "use the search button" when presenting a question.  I am glad to know I am able to reach out for help and and begin threads which as you said may benefit many.  I also value the advice of experienced professionals and newcomers alike.  

@Dennis Canon - I'm currently in the same place as far as gathering agents, contractors, lenders, etc.  I'm excited to begin analyzing deals even just for practice to grasp the full understanding of how to analyze properties.  

I'll definitely let you know if I'm down your way, it would be great to meet up!  

Best of luck

@Mark Nolan

I know the podcasts are fantastic!  That was how I originally learned of Bigger Pockets and now have listened to about 40 total.  Very informative and great to hear successes and struggles from active investors across the country.  

Thanks everyone!

Hey Steve thanks for the info and encouragement.  I'm sure that was a huge asset having a mentor to guide you and allow you to hit the ground running.  What type of properties are you pursuing out in Las Vegas?  I have family out there and am just curious how that market is looking these days.

Greetings BP community. My name is Russell and I'm located in Palmdale, CA.  I first came upon BiggerPockets while searching for an investment podcast to listen to on the way to work.  The last 6 months I have been listening to the podcasts coming and going to work each day.  I finally caved after Josh's and Brandon's constant "quick tip" reminder to get involved on the forums.  I typically am the type to bring something to the table and be able to contribute before making my presence known on a forum, but I realize how essential networking will be to my success.

I'm still very much in the research/education phase and have picked up Jay Scott's book on flipping houses, Brandon's book on no or low down investing, and read through the Ultimate Beginners Guide a few times.  All of these books are exceptional and I highly recommend them.

I can see how "analysis paralysis" is a real thing and that those who are fearful of having everything figured out may never get started at all. As many have said on the podcasts, the first investment purchase will teach you more than any book, but I also want to ensure I'm doing my due diligence to protect myself from any avoidable pitfalls.

I currently have an investing partner; a good friend of mine. We are partnering up in order to pool our capital to get into the expensive market in SoCal.  Currently we are still putting together our business plan and how to get systems into place to achieve our goals.  We plan on targeting distressed properties and executing the brrr method while saving the cash flow to invest into more properties. We'd also like to expand into multifamily properties once we have  grown our portfolio; allowing our cash flow to assist in funding the purchases.  Currently our goal is to have a property under contract in 2017.

 I'm looking forward to the additional education available here on the BP forums and learning from the community.  I am extremely grateful to Josh and Brandon for the podcasts they put on, as I have learned a tremendous amount without the use of a guru. Looking forward to the possibilities.