961: Seeing Greene: How to Avoid High Down Payments and When to BRRRR vs. Buy New

BiggerPockets Real Estate Podcast

BiggerPockets

Investing, Education, Business

4.8 • 16.6K Ratings

🗓️ 28 May 2024

⏱️ 47 minutes

🔗️ Recording | iTunes | RSS

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Summary

One of the biggest hurdles to rental property investing? High down payments. Most lenders want you to come to the table with twenty to thirty percent down, but with home prices averaging around $400,000, it might not be easy to come up with $80,000 to $120,000 on your next deal, especially with today’s high cost of living. So, how do you skirt the high down payment requirements while still locking up solid real estate deals? We’re showing you how in today’s Seeing Greene! First, a Hawaii investor struggles to scale his real estate portfolio with the state’s significant down payment requirements. David and Rob give him some creative ways to still get deals done. A median-income-earning new investor wants to know whether to buy a new construction home or BRRRR his way to wealth. Then, we debate whether a high down payment with cash flow beats a low down payment with negative cash flow. Looking for a better interest rate on your next deal? We’ll share the seller finance strategies you can use to buy off-market properties, plus whether or not you can buy two houses at once with the same preapproval. Want to ask David a question? If so, submit your question here so David can answer it on the next episode of Seeing Greene. Hop on the BiggerPockets forums and ask other investors their take, or follow David on Instagram to see when he’s going live so you can jump on a live Q&A and get your question answered on the spot! Support today's show sponsor, Rent to Retirement, by checking out their turnkey rental properties for sale! In This Episode We Cover How to get around high down payment requirements on your next deal BRRRRing (buy, rehab, rent, refinance, repeat) vs. buying new build homes Weighing the pros and cons of a high down payment with higher cash flow The ONLY type of investor who should purchase negative cash flow properties Seller financing 101 and how to find these hidden deals with rock-bottom rates Buying two houses with the same preapproval and whether it’s even possible And So Much More! (00:00) Intro (01:07) How to Avoid High Down Payments (11:36) BRRRR or Buy a New Build? (20:35) Take Negative Cash Flow? (24:50) Comment Section Callout (27:36) Getting Seller Finance Deals (34:24) Buying Two Houses at Once? (36:53) Ask Us Your Question! Check out more resources from this show on BiggerPockets.com and https://www.biggerpockets.com/blog/real-estate-961 Interested in learning more about today’s sponsors or becoming a BiggerPockets partner yourself? Email advertise@biggerpockets.com. Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	This is the Bigger Pockets Podcast Show 961.
0:05.0	What's going on everyone? This is David Green, your host of The BiggerPockets Podcast.
0:09.0	Here today with Rob Obisolo, with a Seeing Green episode where we arm you with the information that you need to start
0:14.4	building long-term wealth through real estate today.
0:17.6	In today's show we've got some amazing fire questions that you're going to love as well as well as some high energy and some wise
0:24.8	insight. We're going to be talking about if you should build or burr your first
0:29.1	duplex, how to approach an out-of-state investor that owns rentals in your area that may not want them,
0:34.3	the right way to negotiate seller financing, how much house you should buy, what you can do to save
0:39.5	more money, how that money should be spent, if you should always put the biggest down payment possible or not
0:44.4	Hawaiian real estate and more we also cover how much of a of a softy I am and maybe
0:51.6	maybe how landlording isn't cut out for me or maybe how I'm not cut out for
0:56.8	landlording. If you would like to be featured on seeing Green head over to biggerpox.com
1:00.6	slash David where you can leave your question and make sure you subscribe to the show if you like it.
1:05.6	All right, let's get to our first caller.
1:07.6	Hey David, my name is Justin Ossela.
1:09.6	I'm from Annapolis, Maryland.
1:10.9	Head a quick question for you about the SDR market.
1:13.8	I know you do a significant amount of investing, especially in luxury parts of the country.
1:19.7	That's what I do as well.
1:21.1	I've got two investors that I work with, my brothers. We just purchased two luxury
1:26.9	condos in a pretty high-end part of the country, cash flow positive, phenomenal investments. We're really excited. We want to
1:34.4	acquire more. The only problem is that in this market, pretty much the only way to
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