Quote from @Nicholas L.:
@Sarah DeMamiel
it sounds like you have done quite a bit of homework and are putting together a team. that's great. but these are still very tough strategies for beginners in today's market. i just tried a BRRRR (my 4th) in a market i'm familiar with. the numbers didn't work when i went to refinance, so I sold it (as @Jaron Walling noted, it turned into a flip.)
it was a great project, i'm proud of it, i took a house built in 1900 that wasn't livable and brought it back to life, and i made a little bit of money... but it wasn't worth the time i put into it.
you asked for specifics so here's a comment and a question.
-if you do a BRRRR correctly, you likely won't get any cash flow. rates are too high. you'll break even on rent and get all or most of your cash back out when you refi. so BRRRR right now is an equity strategy, not a cash flow strategy. if you want immediate cash flow, that's great - BRRRR is just the wrong strategy for it.
-can your agent help you get off market deals? there are certainly exceptions, but in general, to flip or BRRRR you have to buy something distressed that is off market.
hope this helps
I appreciate the comment and the questions. I understand it is a tough market, but the timing is the timing. So here we are.
Ultimately, having big cash flow isn’t terribly important in the short term. Would it be nice, sure but it’s not necessary. SOME cash flow is necessary for us to move forward with the deal, however.
1900s! wow, very cool. I do love old houses so much! I love to see them come back to life. Someday I would like to live in one. I won’t be buying any for investment though, not initially. Too many unforeseen issues.
I do have a great agent who is an investor herself. The rents are quite high in and around my area. I'm patient. I'm only going to move forward with the deal if the numbers make good sense. As you said, distressed is a must. As much forced equity as I can get out of a property, is the goal. Quality is important, but I'm not going to put more into it then I'm going to get out of it. I want single-family initially, no HOA's, good school district. I'll keep diligently searching until something comes along that we believe makes sense.
My mom and I started a business in California after we were told “don’t bother it’s an over saturated market“ and “it’s too difficult“. Well, we ended up being the most successful in our area. We sold our business and moved to Georgia following my husband’s job promotion.
My mom had me as a teenager so she’s young (relatively speaking ) very active and very capable, as am I. That said, she’s not at the beginning or even necessarily the middle of her life so we’re taking that into consideration.
The few pats on the head (not from you, thanks for that) I’ve been getting in this comment section is actually not a bad thing. We got the same reaction to our initial business plans in California and I have to say, nothing lit a fire under my *** more.
