All Forum Posts by: Sam Bhattacharya

Anything at that price point most likely is in a C- to D Neighborhood. Milwaukee is very block to block sensitive, making it extra important to have someone who has lived in the city long enough to know which ones are great, good, fair, and downright bad. I have lived here for almost 20 years and I still learn more every time I drive around. 

The great days of BRRRR are gone. 

The compression of inventory over the last 10 years has gradually restricted the discounts on the buying side. If inventory is low and competition is high, properties in poor condition will sell for almost as much as properties in great condition. For a good BRRRR you need at least half off ARV, that means buying a 200k home for 100k and fixing it for under 50, that is just not realistic anymore. It will sell for 185k as is to a first time home buyer with a handy family, who has no idea how much time and money it will eventually cost him to complete a full gut rehab.

@Dominic Pizzi Yes Kansas City is a great market for real estate investors. Appreciation is here as well as cash flow. I can show some really good examples of what some outside and inside investors have been able to accomplish, even with the rising interest rates.

The answer is no...sorry.  This is a math problem.

First, the only cost to the REI for a property is the cash they spend. By paying all cash, you have paid full price. If a property cash flows, then the tenant is paying for the rest...not you...and they do it without question. You just took over their job, and are NOT saving money in the process. You are losing money because of it. Also, like any business, you don't start to make a profit until you recover all of your cost, so, with that in mind,...

Here are your numbers buying all cash:
1 - Your cost (cash) = $160k
2 - Your cash flow per year = $11,200
3 - Number of years to recover your cost and start to make a profit = over 14

Here are your numbers buying with a 20% DP:
1 - Your cost (cash) = $32k
2 - Your cash flow per year = $1080 (assuming 30 years/7% interest)
3 - Number of years to recover your cost and start to make a profit = over 30...so even worse.

I won't touch a property unless my cost recovery time is less than 6 years.

Some get crushed.

Some make money.

Some sit still.

Some hunt and buy good deals.

Here’s my thing on brrrr and why I think it’s amazing no matter what a market is doing.  

I can borrow someone else’s money to buy an asset. 

I can use someone else’s time to renovate it. And likely, someone else’s money to pay for the renovation. 

I can use someone else’s money to fully pay off the first person I borrowed from. 

I can then get a new loan, that someone else / the tenant will pay off for me. 

I mean really, I feel like Christmas morning after every successful brrr. Like a spoiled little kid. It’s amazing. 

No matter what a market does, apart from an actual nuclear, apocalyptic meltdown collapse where Zombies are eating investors alive, I’m all for another 1000 brrrrs. 

So there aren't any companies that vet lendees and make the process more smoother and protect everyone involved?

I got started in RE 9 years ago and EVERYONE around me told me not to. "market is too hot" 

A few years in I was told there are better ways to make money since I have "nothing to show for it"

Today....they are silent.

Taking massive action is the ONLY way to succeed. APPLIED knowledge is power.