House #4 Purchase Details

Have you ever bought a house in a pandemic? This was actually our 3rd closing since Corona hit, so we know the drill pretty well. My favorite was the refi on our personal house that we did in our driveway, wearing masks and gloves on a garage sale table…because..who’s going to let a little pandemic stop them from reaching their financial goals?! Not the Templeton’s!! Shoot..I even put on my fancy muscle tank and best jean shorts to mark the occasion.

But..I am here to tell you all the numbers, since that is one of my favorite parts of these house posts. (Mainly because I’m super nosey and want to know all the details of other people’s purchases, so happy to share when I buy one)

Here they are:

We bought The Toto House off a wholesaler who was asking $50k and had another offer for $40k. I told him I was all in at $38k and could close within a few days. He accepted our offer, even though it was lower, because the other guy was flaky and he liked that I would close fast. We paid $40,141 total and had the shortest and least amount of paperwork in the history of time. So short that I almost forgot I was buying a house and my husband had to remind me we needed to ask for the keys. 😅 This experience of negotiating with all cash and an easy fast close makes me want to do all cash from this moment on!!

Our goal was to use our HELOC on our personal home, but our bank is not into fast and easy closings..lol. It’s a month in and we still don’t know when or how much we are approved for, so this was bought with our savings and part from a private loan.

We are estimating about $10,000 in rehab costs, another $2,500 in closing costs for the refi, and low comps in the area are right around $75,000. If we appraise at the lowest expected amount of $75,000, then 75% LTV would be $56,250. When we stay on budget, we will be all in at $52,641. So we should be able to pull all of our money out and also make about $3,500. If we underbid the rehab, then that $3,500 also gives us some flexibility within our budget or on the appraisal, both learnings from my last project. (We did also already account for 10% contingency)

Excited to get started on this as our first DIY renovation. (will sub out floors but plan to do a lot of the rest on our own) Of course this is just the B in BRRRR and I will share any and all details along the way. Let me know what questions you have!!

The Power of Negotiating

Have you ever wondered what’s negotiable? The simple answer is everything is!! Yet not everyone uses the power of negotiation to get what they want or what they deserve.

Some of the most common areas that negotiation comes into mind is for a job salary, or maybe for major purchases like a car or house. But not everyone may realize other things you can negotiate, so I’ve compiled a list to give you some ideas and to get you thinking on creative ways you could negotiate these items.💡

1. Electronics

2. Furniture

3. Medical bills

4. Fees such as interest rates, overdraft, late fees, etc.

5. Job title

6. Job benefits package

7. Real estate

8. Renovations

9. Income tax

10. Services of any kind

11. Food

12. Education

13. Credit card debt

Now that I’ve got your wheels turning, I know there are really 3 types of negotiation tactics to consider.
1) People who believe they cannot negotiate or quietly take the first offer fearful of missing out.
2) People who aim high and believe in splitting the difference to come to terms.
3) People that are ready to speak up with valid points to support what they want and are not afraid to stand firm or walk away if needed.

The 2nd option is great for someone who is new to negotiating, however, option 3 is what you should be aiming to reach. Your first few will always be a little rocky, but as you practice and win a few, you will start gaining confidence and figuring out your personal negotiation style.

Then you can start coming to the table with 2-3 facts clearly outlined to support your side. It’s very important to master the art of knowing when to present them and then knowing when to stop talking, sit quietly, even with awkward silence, and wait for their response to your request. The worst that can happen is they say no. Which a no is your opportunity to be prepared to thank them and walk away. No usually means not right now, but you will be surprised how many of these “no’s” will turn into “I’m listening now” in a few days or weeks time, when the other side realizes your offer was strong and they will respect your ability to stand firm. Mindset is key because if you don’t believe you deserve it then nobody else will believe it and they will see right through you, so start by always knowing your worth and never compromising on it.

Keep in mind also that not all negotiations involve money either. For example, sometimes time may be on the table, such as in real estate. I was able to make a lower cash offer because I also knew that I was able to close in under a week, which made my offer strong. Time is also something that can be negotiated in a benefits package if you are offered a certain amount of time off in a benefits package..you can always ask for more!

One of my most random negotiations included 8 month pregnant me at a car dealership with a craving and making sure they added a pizza on top of all the other items I wanted on my SUV. I am a believer that if you aren’t asking, you could quite literally be leaving food on the table.🤰🏼🍕

One of my favorite recent wins was the $12k below asking I was able to negotiate on our recent home purchase. I used time as my offering instead. I knew he had an offer above what I put in by $2,000, but I told him I was able to close quickly. Turns out he wanted the guarantee of a quick close (in 4 days) more than the $2,000 and waiting for that other person to gather their funds and possibly not being able to.

Share your negotiation wins with me!👇🏼👇🏼

Review Of Our First BRRRR

We are now onto the Final R in the Buy, Rehab, Rent, Refinance, Repeat, so I wanted to share the final numbers and the many of newbie mistakes that were made on our first BRRRR. Let’s start with the final numbers.

Purchase Price: $37,500

Repairs/Holding/Closing Costs: $55,400

Total of our money left in the deal: $12,000

Appraisal: $100,000 (We are still in shock that it came in this low, as we were expecting more in the $110-$125k range)

Ideally, the whole point of the BRRRR method is to end up with instant equity and be able to pull out all or a portion of your money so you can use it for the next deal. Well, we are leaving ALL of our money in the deal and we ended up doing 85% LTV instead of 75%. Ouch..that really BRRRNs. (see what I did there) Am I saltier than the sea about how it turned out and the appraisal coming in super low? I sure am. BUT we also learned SO MUCH that we wouldn’t have if we didn’t go through this process. So, I wanted to share it all with you to ensure you don’t make the same rookie mistakes that we did on your first BRRRR.

1. We went through a wholesaler. Which means we paid for their services of finding and negotiating this off-market deal. We could have easily saved around $10,000 if we would have gone direct to the seller and took out the middle man during the acquisition process.

2. We subbed out all of the work. This means that we did not put in any sweat equity, except that one time I stood in the pedestal sink and painted the bathroom just out of stubbornness and not liking the color. Sweat equity is one of the ways we could have saved big on costs, but we would have had to spend our time, so there is always a trade-off either way. After reviewing all of the work that was done, we could have easily saved another $5,000-$10,000.

3. We used a hard money loan, and in exchange we paid a lot in holding costs. Next time we will explore other ways to fund the deal that don’t come with such high costs, such as a HELOC or private money. Holding costs were even moreout of control with COVID related delays, but we could have saved another $2,500 at minimum if we didn’t have such high holding costs.

4. I am just going to be honest here..we dropped the ball big time on the market analysis. I am not an expert, nor did I consult one and just went with what I was seeing online and didn’t research the appraisal process. If I had my real estate license and could have pulled comps, then I could have been more familiar with the area ahead of time. I would have been more conservative on the appraised value we expected to get back and that would have had an impact on all of the other numbers we ran. I also feel like there were a few things that we could have tweaked during the renovation to get a better appraised value. Overall, there was probably another $10,000 in equity we may have missed out on here.

What Went Right

Now that we have discussed the doom and gloom and all that money we left on the table, lets switch gears to what went right.

1. WE LEARNED. You can read all of the books, listen to all of the podcasts, and follow all of the most amazing Instagram accounts out there, but there is no substitute for hands on experience. We now know the entire process and have broken every aspect of it, so we now know how to fix it for next time.

2. WE EXPECTED TO LEARN. Since we knew it was our first BRRRR and major renovation, we were hoping for the best but also planned for the worst. We are OK leaving our money in the deal.

3. WE GREW OUR NETWORK. We had to find all of the necessary resources for each step of the BRRRR process. For this one deal, we worked with a wholesaler, hard money lender, general contractor, a few subcontractors, real estate attorney, loan officer, and property manager.

4. WE HAVE ANOTHER CASHFLOWING ASSET. After it’s all said and done, our monthly mortgage will be around $690. We are getting $1100 in rent each month. Since we replaced all cap ex items during the renovation, we shouldn’t have to worry about anything major needing replaced right away. After all expenses, we are bringing in $250 a month in cashflow on this one. I will take it!

Am I ready for our next BRRRR? I’m honestly not sure if we will continue with this strategy or switch it up, but I am ready for our next house. We have some ground to make up for since 2020 has been a shit show of a year so far on many levels. But for our real estate business, we still have a goal to double our doors from 3 to 6 this year, so we will definitely have to get creative to accomplish this. Let me know if you have any ideas to share with me to help us double our doors!

A REAL Behind The Scenes on Real Estate Investing

As a new real estate investor, I am always seeking out information and I do a lot of reading of posts on social media and blogs. I like to see the real life posts that cover the good, the bad, the mistakes, and the realities of the work put in by more seasoned investors. Much like all aspects of social media sharing, I find myself constantly seeing fantastic results and amazing deals and cashflow number. Someone that just bought a 3/2 duplex that cost them $70k and only needs $5k of work and will rent for $1500. Like “too good to be true, one lucky deal of a lifetime” kind of numbers and that’s about it. (Keep in mind that just because someone says they are an investor, doesn’t mean they are a good investor or giving good advice, so make sure to do your due diligence, even as you read through my posts)

There are a few accounts out there that cover it, but I rarely see mistakes or major setbacks being posted. So where’s the real life? The mistakes you made in estimating expenses? Those houses you have sitting vacant and can’t find a tenant, or the ones that still have a tenant in that’s not paying rent? The missed day of playing outside with your kids because you’re putting in work again?

Welp, don’t worry..I got you. The past few weeks have been filled with a hell of a lot of reality over here. To start, we have dealt with our first money pit. It just keeps having one thing after another pop up, including electrical issues, plumbing issues, and a flooded basement after we received 9 inches of rain. They have all been little things but they are starting to add up and wear us down, along with the tenant. We have also dealt with our first three day notice for eviction due to a lack of cooperation and nonpayment. We have since received partial payment and are working on the remainder of May rent, BUT tomorrow is a new month, and let’s be real, not expecting things to be any different for this tenant who is currently laid off due to COVID-19 and says they are waiting on checks. We had to enlist legal help with all the COVID-19 to make sure we could even explore eviction right now. We have also dealt with finding a potential flip with our first partner, then we put an offer in on it, only to realize there’s a bunch of folks out there ready to overpay and it received multiple offers over asking. Lastly, I got to spend a gorgeous day stuck on my laptop spending hours gathering documents for the lender on our cash out refi.

This time for us in our investing business has been scary, exhausting, hard, and educational to say the least. This post is also not meant to discourage you by any means. I still believe in the power of real estate and just want to help you be prepared for the “when it rains it pours” that you will inevitably go through in your investing journey. So, how are we surviving it?

The 3 M’s-Mindset, Money, and Management

Mindset-I will keep it short and sweet. I will take a rainy day in the real estate game any day over sitting on the sidelines. I still feel GRATEFUL even on the worst days to be where we are today with our rentals.

Money-Reserves. This is why they tell you to PLAN AHEAD and have your money right, so it becomes annoying not devastating to your business. Luckily, we were ready for everything that has hit us financially, and are ready for whatever other rain or flooding (literally) that comes our way next.

Management-Also keeping this short and sweet..our property manager has helped us tremendously with all the issues above, and while we could have done everything on our own, I wouldn’t have wanted to. Having a great team is WORTH EVERY PENNY.

So there you go..reality and my reaction, and keeping it real that it’s not all cashflow and smiles every day. I hope this helps others understand a real behind the scenes of real estate investing!

Rental House # 3 Details

We were so excited to have our renters move in last week, and we will be receiving $1100 a month in rent for this one. I thought it would be a good time to walk through what we learned on our first BRRRR and full interior remodel. We picked up the Indy Beauty from a wholesaler right before Christmas for $37,500. It was full of junk, a few squatters and smelled terrible, but was also full of potential, and we couldn’t be happier with the end results.

Here’s the before walk through video as a reminder of how dark and dingy it was.

Here’s a few after pictures from our rental listing

The whole renovation took about 60 days, if you take holidays and bad weather into account. We used a General Contractor to manage the interior renovation and oversee any work, and we used our own subs for the exterior work. There is no way we would have been able to handle a project of this scale on that timeline, so we were happy we hired it out.

Not only was this our first time purchasing off market from a wholesaler, it was also our first time using a hard money loan. Total renovation and holding costs for the hard money loan we used came out to be a little under $50k. This covered a six person three day clean out project, complete interior remodel including new flooring in kitchen/bath, refinishing the existing hardwood and cabinets, exterior painted, new windows, new appliances, HVAC, and electric panel (sure I’m forgetting something). We also did some extras to help reduce any maintenance or expenses in the foreseeable future, such as replacing sections of the fence, trimming all trees, removing several, and installing automatic garage door openers.

Since this was our first time working with a hard money loan, I wasn’t sure what to expect, but it was pretty easy. We closed on the home in under two weeks of looking at it and it was easy to get the renovation money. We had to put 10% of our own money down for the hard money loan, so right around $8,000. We had a 50/40/10 arrangement with our contractor, so our lender needed a statement of work upfront and then did a walk through at the 50% mark and we received the funds wired to our account same day. I will say the hard money lenders definitely make a profit, so we will also do a better job next time looking at a few options and seeing if we can find one with better rates or look at private lending options. Luckily, even with the high fees, the numbers still made sense on this house, even with us going a little over our initial renovation budget.

So, if you’re keeping track of the BRRRR, I’ve covered the buy, rehab and rent piece so far. We were using a private lender to do our 30 year cash out refi, and had completed all of the paperwork, jumped through all the hoops, and were just waiting on the appraisal, which was scheduled for this past Tuesday. Well, the appraiser didn’t let us know he wasn’t coming and just didn’t show, and then an hour later, we got an email from our lender that they are pausing their 30 year cash out lending program due to COVID-19. So, well, that was a really really frustrating email to receive. BUT, it means we now just have to wait until June, when we have owned the home for 6 months, and will use our traditional lender and look to be approved based on us as borrowers opposed to off the asset. (as long as they are still doing investment property loans..who knows with all the craziness going on right now what the world will be like in June)

So we have two things that are currently out of our control left on this one. 1) The appraisal-we need it to appraise at $120-125k for us to be at a 75% LTV to pull all of our money out and pay off the hard money loan. This is in line with other homes in the area, and ours has some extras, such as a huge corner lot, unfinished basement, and a detached garage. Worst case scenario, if it appraised below or the housing market crashes between now and June, then we would just end up keeping some of our own money in, right around $10,000 of our own or possibly more if it appraises super low, which we are comfortable with doing if needed. 2) Being able to even get financing. I’m just not sure how the current state of the market and the pandemic will impact cash out refinancing for investors 90 days from now. Assuming they may tighten up their requirements or may want to steer clear of cash out refis all together..who knows. So all we can do at this point is just wait and see and be prepared for a worst case scenario. This will put a hold on our goals of buying a few more houses using the BRRRR method for the time being, but we will be ready to purchase again when it makes sense.

In summary: Purchase Price of $37,500 and Renovation/Holding Costs around $50,000 for a total of $87,500. Hoping for an appraisal around $125,000 and currently getting $1,100 a month in rent.

How do you think we did or what questions do you have for me about the process?

My 2020 Vision

When you stop and reflect..only to realize you went through the all the previous decades you’ve been in existence without goals, you decide to make up for lost time by going BIG.  Not that I have ever really gone small at anything ever, but it’s different.  Something about this year reminds me that whatever I think, whatever I envision, and whatever I write down is mine.  I don’t have that “one day” or “maybe next year” or “I wish” or “must be nice” mentality any more.  I know who I am and what I am capable of and create the shit out of some positive energy.  I am not locked and loaded with excuses that “I don’t have time” or I can’t afford it” either.  I know that I have time for the things that I make time for and I am in control of my money and tell it where to go.

Last year was just a tiny taste, a sip of what my life can really be like and I’m back for more.  I have decided that this will be the BEST DECADE EVER!!  I came up with my goals back in December, but since I’m an ever-evolving person..lol..I wanted to give them a few weeks to simmer before I put them out into the world.  I am now ready to share, and I have decided that 20 goals for 2020 is only appropriate.  My list is below and you know the drill..ask me questions and would love to hear your 2020 goals!!

20 SMART GOALS FOR 2020

  1. Get tenants placed in Indy Beauty by 3/1 and cash out refi by 6/20
  2. Use Self Directed IRA to put 25% down on a multi-family by 9/1
  3. Take childless trips to both the beach and the mountains by 11/1 and let the kids plan spring break trip location and agenda
  4. Hike our first mountain
  5. Obtain my real estate license or shadow and do my first wholesale deal by 12/15
  6. Build-up/Maintain 6 months liquid reserves for all rentals owned by 12/1
  7. Set up LLC by 3/1
  8. Acquire next BRRRR deal by 6/1 to be ready to close by 6/21 (or earlier if the deal finds me..lol)
  9. Have private money lending capital self-funded at 10% of goal to be our own bank by 11/1
  10. Max out family HSA contributions by 12/15
  11. Read 25 books this year
  12. Once I hit 10k followers, give away $1,000 to help someone else towards their financial goals
  13. Coach 2-3 people to become debt free and/or get started in real estate by 7/1
  14. Start researching markets for out of state investments to start 2021 off with a bang
  15. Work towards dinner at the table Mon-Thur (on activity free nights) and at least 1 hour screen free family time Fri-Sun
  16. Expand my meditation practice from 15 minutes up to 1 hour
  17. Learn 3 new skills/hobbies, enough to be dangerous..lol
  18. Cashflow new carpet and exterior paint for primary residence
  19. Analyze food budget and meal prep to find areas to improve health and decrease costs
  20. No Spend Year again!!! (clothes, shoes, accessories, purses, makeup, haircuts/dye)

 

 

I Like Big Books and I Cannot Lie

When I think back on the first 35 years of my life, I literally read only a book or two a year, and I can promise you they were trashy books.  There certainly weren’t any self improvement books in the mix, and if I’m being quite honest, I used to think those types of books were cheesy.  Last year, I changed my mindset and made it a top goal to educate myself.  I ended last year having read a total of 43 books!!!   Don’t worry..there were still some trashy books in there, 11 to be exact, but the rest were educational.  Whether it was about finances, real estate, self development, or parenting, each of these books has given me at least one takeaway that has made me grow as a human.  I’m listing each of them below (in no particular order), so just click on a book for the full description in case you are looking for your next read!  

If you are looking for an amazing Audible discount or Kindle Unlimited, or even just other book recommendations, click the link below! Let me know if you have any questions..I’m an open book. 😉

https://amzn.to/2RoSQpM

 

(Full Disclosure: These are affiliate links, so anytime you click on a link of mine and purchase, there are a few pennies that help go towards administrative costs of running my blog)

 

Reflecting on 2019

There will be a whole 365 days in 2019 for us to have set goals, have taken action, worked hard, and to have crushed those goals. Year end is a great time to throw modesty out the door and recognize how great your year was and how awesome you are for all that was accomplished.   If you did the work, then I don’t care who you are, you deserve to celebrate, so go on..brush your shoulders off.

If you instead stayed on the couch all year again, and your biggest accomplishment was only gaining 10 lbs from all the junk you ate while binge watching all the Netflix original series..well then..might be good to reflect on that also.   Still playing the “victim of your situation” game and convincing yourself that you can’t change or grow because “insert your excuse here”.  Did that binge or pity party help you or hurt you?

Not trying to brag below I promise you..just trying to prove that you CAN do big things if you set big goals and are ready to take action and put in the work.   You can and should think differently about life and the pursuit of happiness..question things and don’t just do what everyone else is doing because it’s easy.  Also, I’m sharing some stuff that makes me feel vulnerable and gives a private look into some events in my life over the past year.

If you’re not ready to grow and celebrate success, then please stop reading this and head back to your latest Netflix binge. If you are ready, but not sure where to start, start by grabbing a pen and paper and write down everything you accomplished this year that makes you feel proud to tell others and makes you feel like you have grown as a person.  Then go share it with the world!!

See my list below:  My 2019 Accomplishments

  1. Started MySemiBasicLife.com blog and InstaGram account
  2. Grew organically from 150 followers to 1250 followers
  3. Helped teaching my youngest to read and my oldest to read and rehearse lines for a major part in a play
  4. Bought 1st rental property end of March 2019
  5. Bought 2nd rental property in August 2019
  6. Bought 3rd rental property in December 2019 (this one with a full cosmetic rehab)
  7. Was a guest on not one, but two podcasts, and submitted an idea to one of my favorite podcasts, and got to speak with the producer and provide input on a new series (can’t share any more info..sworn to secrecy..lol)
  8. Became debt free after selling our cars and paying off the remaining of our $165,000 in consumer debt. Nobody to impress now that I’ve changed my value system and if I don’t have the cash for it, then I’m not buying it.
  9. Completed a No Spend Year of no clothes, shoes, accessories, purses, makeup, haircuts/dye. Turns out I don’t give a shit what others think of me after all, and I don’t need makeup or new clothes to try and impress anyone.  “Letting myself go” in the eyes of society by not wearing makeup, rocking my grey hair, and not buying the latest clothing trends feels a lot more like getting comfortable in my own skin.  I’ve never felt prettier on the inside and out then I do right now.  I also learned to cut my own hair..not getting accepted into cosmetology school anytime soon..lol, but I can do it and it’s fun and free.
  10. Joined a real estate mastermind group and joined a local real estate investors group and have networked and made several great connections in the industry
  11. Attempted my first seller finance deal (didn’t work out but was a great learning experience and made some new connections in the process)
  12. Helped land a few really big accounts at work that required a lot of work and were out of my comfort zone
  13. Was matched with a little sister through Big Brothers/Big Sisters and continued to volunteer on the family selection committee for Habitat for Humanity
  14. Survived a lot of loss including losing a good friend to glioblastoma, losing my dog of 17 years, losing a terminal puppy we adopted, a dwarf hamster, and a pet rat. Lastly, there was an advanced stage breast cancer diagnosis for my mom with lots of biopsies, dr visits, chemo rounds, lots of soups/casseroles and will be leading in to surgery/radiation/hormone replacement in 2020.
  15. Started a gratitude journal that I write in every night.
  16. Started a daily morning meditation and manifesting the life I want practice.
  17. After my leg injury finally healed, was back up to running over 5 miles until I got bit by the neighbor’s dog..lol
  18. Stopped two nasty habits that I have battled on/off for years, smoking and drinking.  I still occasionally have a beer or drink, but not like I used to and have been smoke free since 6/1/19!!  I’m now focused on enjoying my current situation more and building a life I don’t need to escape from.  No judgment to my friends that are still doing these things..just doesn’t fit in my life any longer.
  19. I read 45 books this year!!
  20. Experienced 6 figure net worth growth through all of the above focus, hustle and sacrifice

Wow..I DID ALL OF THAT IN ONE YEAR??!!  I did notice that I didn’t have as much of a focus on my marriage or kids this past year, and plan to make sure I am placing more focus on those areas of my life in 2020.  Of all of those accomplishments, I am most proud of the self love and belief that I can do anything..because clearly I can after seeing my list!!  Also, with the belief in myself, I have noticed my risk tolerance is completely different.  I am ready to take on risks instead of turning away from them, because I know I will learn and grow from any mistakes, so bring them on!

Did you write a list of goals at the beginning of 2019 that you can compare your end of 2019 accomplishments to?  If not, no worries, because  I didn’t write any goals out at the beginning of the year either.  2020 marks the beginning of a new decade and new opportunities to start fresh for all of us.  Make it the year you stop saying “someday” and finally replace it with today.

Anyone else brave enough to share their year in review??!!

BRRRR it’s getting cold in here 🥶

I know I know..I’m sure everyone is thinking there must be some Toros in the atmosphere comes next?! Or maybe I’m the only old ass nerd still out here quoting Bring It On, which by the way, happens to be a classic cheerleading movie. 📣 🎥

Ok focus..it IS super cold and snowing hard here in Kansas City today, so it’s perfectly timed to talk about BRRRR, which is why we are all here (not from the cheerleaders movie or cold weather, but the real estate investing version). The strategy has been around for a minute, but the guys from BiggerPockets hold the clever naming rights I believe.

I am SO SO SO PUMPED UP to be getting after our very first house using the BRRRR method. So I wanted to explain this strategy very high level, and how it can be a great way for investors to grow a portfolio of buy and hold properties quickly, and with little of their own money tied up in the deal long term. Clearly I’m a newbie and can only speak to what I’ve researched/read/listened to, and what real life has brought my way so far, but thought I could at least introduce the concept to other newbies.

The premise is a way to use little of your own money while growing a buy and hold portfolio. In its simplest form, it stands for buy, rehab, rent, refinance, then repeat. We are still in the “buy” phase of ours, set to close this week, and excited to move into the rehab piece and plan to share the full details once we wrap up this project. We are going to just use some rough numbers here as an example.

Let’s say you find a distressed house or a homeowner who needs to get out fast of their current home. There’s lots of ways to find these deals, which I’m not going to cover in this post, but will save for another day. The distressed home or owner is an opportunity for you to help solve their problem and to buy their house from them. You would aim to acquire low, due to current condition of the home, taking into consideration all of the repair costs, and your ability to close fast. You would also need to make sure all of the numbers truly work for a BRRRR. But let’s say you can get this house for $30k and it needs an additional $30k in renovations. You use your own money, private money or hard money for the initial purchase and rehab (also lots of funding options I will also save for another post).

You know from looking at comps in the area (not houses for sale, but comparable houses that have already sold recently) that the ARV, or “after repair value” is around $100k. You have also checked average rents in the area, and know it will rent for $1,000 a month. So, after you rehab it and rent it out, then you go to a traditional bank for a cash out refinance on the property at $75k, and you pay yourself or your private money lender back and you now have none of your own money tied up in the deal and have acquired an asset with 25% instant equity. You have a tenant placed and are now cashflowing a few hundred bucks a month after your mortgage/expenses. You also walk away with a $7,500-10,000 profit (after closing/holding costs).

You keep repeating this process until you get to your buy and hold end game number, whatever that is for you. Work until the cashflow covers your monthly expenses to live, then you can sit back and enjoy your time freedom from your rental portfolio, or you never quit…completely up to you. 🤷‍♀️

I know I’ve simplified the process, but that was my intent. There are a TON of resources out there, including lots of investors using this strategy and sharing their successes/learnings, lots of podcasts, and even some books, so go do your research and dive deeper to fully understand. I would also love to hear input from others out there who are ice cold BRRRR experts. I just love this strategy and I hope sharing from my real estate investing toolkit will help you either get interested in getting into real estate, or help you to strengthen your current investing game.

Intro time

Intro time! I want to learn more about all of you, so please share as little or as much as you want. I will get it started. 👋

My personal residence in the Kansas City area is what I call “the zoo”. Always lots of dogs and kids running in and out and if the garage is open, then let yourself in. 😉

I have two awesome kids..one who is learning to read and the other is reading lines in her latest city theater play. I have a very patient and supportive husband, with a beard, who breaks gender stereotypes by cooking, doing dishes, AND the laundry. 🧺

A few hobbies include meditating, yoga, running, reading, writing, eating but not cooking, and volunteering on the board for Habitat for Humanity and as a big for big brothers and big sisters. I work for an insuretech company and my degree is in sociology with a minor in psychology and I LOVE people watching. 👀

When I look back on what we’ve done this year since I started mysemibasiclife, it’s been a journey of finding our values, embracing minimalism, doing a No Spend Year, paying off $165,000 in debt, buying two rental properties, and continuing to build wealth through diversification. 💰

My goal is to help you take control of your mindset and financial future, so you can design a life and a legacy to leave your mark on this world. 🌎

I’m an open book, so ask me any questions and tell me about yourself. 👯‍♀️

Photo credit: my yelling and my IPhone timer