How I helped my own son buy his first rental property at 18…..
So, we know that true wealth in real estate comes from a combination of time (equity), inflation hedges, and lastly, cash flow.
And an 18-year-old has plenty of time; the only thing he might not have is the cash or the credit to buy a property using a conventional lender, or the money to put 20% down on a done-for-you (out-of-state) property.
So we have to get creative. And the solution is a great strategy for anyone who either doesn't have the 20% to put down or maybe doesn't want to put 20% down.
He could come up with about 10–12% to put down on a nice B class property in a linear market like Memphis, Birmingham, or even Little Rock.
So how? I immediately thought of the BRRRR method. What is the BRRRR method? If you're not familiar with the BRRRR method, it stands for Buy, Rehab, Rent, Refinance, and Repeat. It's a popular strategy for real estate investors who want to build a portfolio of rental properties while minimizing their upfront cash investment. However, it can be high risk and also be a time-consuming and not easy for out of state investors with no experience in that market or finding good properties.
This method wouldn’t work for me or my son because it is ACTIVE investing, I don’t have the time to fly around to these markets, find distressed properties, make offers, find contractors, etc.
Because of my long-term relationship as an investment counselor at Norada Real Estate, I immediately knew the option for us, and it is a version that is in between a Full turnkey purchase (20% down) and a BRRRR.
I personally call this product the HYBRID BRRRR. I have a partner in Memphis that has been a long-time trusted turnkey property provider, and I have helped him put this program together for our clients. With this program, you can still take advantage of the benefits of the turnkey model, but with less upfront cash, which means you can make your money work harder for you by owning MORE properties for the same amount. This is a great strategy if you are in the buy and GROW phase of investing because you can scale faster.
We have had hundreds of clients here at Norada buy these for years now, and I just completed 2 for my own portfolio and one for my son.
Here are some of the key benefits:
Our rehab team in Memphis will find you the deal and package it up perfectly.
They will source the property, do the scope of work, manage the rehab, turn the property over to the local PM, and give you weekly updates on the status of the rehab.
They line up everything you need or don't know you need, like hard money lenders (if you need them), insurance, and help with the refi at the end.
You can buy almost two properties for the same down payment as a standard turnkey purchase or you can have more equity in your property and a higher cash flow (it’s great to have choices)
These are considered "all cash" deals, which means you have the flexibility to use different financing options (HELOC, hard money, etc.) or your own cash if you have it. We do have hard money lenders lined up for you if you need it*
You can scale your portfolio much faster than with the traditional 20% down.
To help you understand the program in more detail, I've created a video that explains everything you need to know.
You can watch it -----------------> here
This program isn't for everyone, but it does make sense for growth strategies and growing your portfolio faster.
If you're interested in learning more about this opportunity or have any questions, feel free to reach out to me. I'd love to hear from you.
Melissa