All Forum Posts by: Shawn Furrow

@Fran Pratt @Joshua Patrick

I was ultimately able to do a 100% BRRRR and get all of my investment back and it still cash flows about $200/mo after putting money away for CapEx, repairs, vacancies, etc. It's not a ton of cash flow but I get to use my money again so I'm pretty happy with that. I learned a lot which was my primary goal with this one. Now I'm currently looking for my second deal but it's been slim pickings in my area. Sorry for the late reply!

@Ashley Noethe

Somehow I missed your reply until now. Yeah perhaps the biggest thing weighing on my mind right now is how much the house is going to appraise for when I'm done renovating it and how much of the HELOC we can pay back with the refi. So yeah hopefully my numbers turn out to be at least close. Thanks!

@Matt McGuire

Wow those all sound like great options. I especially like the 0% CC to 401k loan idea. Pretty creative. Thanks for sharing!

Thanks for checking in! So I ended up getting the HELOC and I am currently using it as short term funding for a property I just bought two weeks ago (first deal!). The HELOC covered the purchase of the house in full $80k as well as 80% of the renovation. My plan is to BRRRR this one and get most (or possibly all) of my HELOC money back out. We'll see how it goes!

@David M.

Yeah the sellers concession is not a bad idea. I am short the entire amount down if I want to not take from my cash reserves. Sounds like I should probably wait and save up some more. Which was sort of what I figured but wanted to see if there were other options. I know it's always easy to come up with reasons to wait so I was trying to not do that haha. Thank you for your advice! Much appreciated.

@David M.

And to clarify...I do have a decent amount of cash reserves for emergencies and other things that could go wrong. I just don't have any capital that I'm willing to put into a deal right now. This is my way of mitigating the risk of not being able to pay off the HELOC.

@David M.

Thanks for your reply! The HELOC would be variable rate for 30 years (10yr repayment, 20 year payback after that). As far as my financial situation goes, like I said I can conservatively save about $3k per month without squeezing myself. However that obviously isn't enough to pay back the HELOC in 12 months. My thinking was maybe pay it over 2-3 years but if I do that then it will be tough to save for the next deal. Ideally I would love to do a flip for my first deal to get some initial capital back after paying back the HELOC but in my local market (Washington, DC metro region) my agent feels it would be hard to flip anything other than a SFH but that would be too high of a price for me to start at.

I have been spending a ton of time educating myself in the realm of RE Investing and I've been analyzing deals looking for a good one to make the jump. I believe I have found a few potentially worth making the jump but I'm not sure how to go about funding one. I found a house that would require a 20% down payment of $40k. This property should cash flow about $230/mo with a CoC ROI of about 4.5% if I were to pay the down payment in cash and put $20k in rehab. I do not have this in cash but after talking to a loan officer I do have enough equity in my personal home to get a HELOC for potentially as much as $140k for about 6.5%. If I took out $60k for down payment and rehab that would leave my monthly interest-only payment of $350. So the HELOC payment would be more than the monthly cash flow. However, I do have the ability to save up probably $3k a month from my day job so I could easily cover the difference and even begin to either save for my next deal or start to pay off the HELOC (or both).

Given all of this, does it make sense to do the HELOC just to get into a deal earlier or do you all think it would be better for me to wait and save up more capital before jumping in? Are there other funding options out there that would make sense in my situation? Thank you in advance for your help!