We recently accomplished something new. As of November we successfully completed our first out of state BRRRR investment property. If you are unfamiliar with the BRRRR method, check out Bigger Pockets. (Have fun going down the rabbit hole!) BRRRR stands for Buy, Rehab, Rent Refinance, Repeat.
We bought an investment property in Louisiana, rehabbed it, rented it to a tenant, and refinanced it all while living in Tennessee. We still have never seen the house in person. It is currently cash flowing as a rental. This month we completed the cash out refinance which allowed us to pull out all the cash we had invested plus about $5,000. Now, we can take this money and put it towards another property to do the same thing all over again. It’s like the bank paid us to buy a rental property!
This all happened right smack in the middle of the COVID pandemic and the large majority of all the credit for making this happen goes to 3 Rockstar members of my “team” on the ground in Louisiana. I have a Realtor/Property Manager who did the most work. He brought us the deal, negotiated the purchase price, oversaw the rehab, placed a tenant, and connected us with a great local banker that funded the deal. The local bank was able to fund 80% of the purchase price and 100% of the rehab costs. The last Rockstar of the group is another local banker who is refinanced the loan at 75% of the appraised value and an incredible rate for an investment property of 3.25%.
The biggest lesson we learned in this whole process is that putting together a stellar team makes us much better investors than trying to do as much as we can all on our own. Being out of state, we didn’t have much of a choice but to rely on other people to make the deal happen. Honestly, if it was a local deal we would have probably been more hands on and it would not have gone as smoothly. We will be taking this experience and putting the lessons learned into how we invest locally as well. We are much more successful when we focus on finding people who are better than us in their areas of expertise and relying on that team to get the deal done. No one succeeds alone. Surround yourself with people who are smarter than you. It will only make you better!
Cheers to a better financial future! Feel free to reach out or comment.
Written by: Erik Wright of New Horizon Home Buyers