Surviving When the BRRRR Hits the Fan with Josiah Smelser (Part 2, Post-Coronavirus)

BiggerPockets Real Estate Podcast

BiggerPockets

Education, Business, Investing

4.8 • 16.5K Ratings

🗓️ 15 May 2020

⏱️ 72 minutes

🔗️ Recording | iTunes | RSS

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Summary

What happens to a no-money-down BRRRR investor when a pandemic breaks out, lending standards suddenly tighten, private money lenders get skittish, and property values quickly drop? Today, Josiah Smelser returns to the show and tells all. In Part 1 yesterday, we learned how Josiah built a $4M portfolio by buying, renovating, renting, refinancing, and repeating using both hard money and private money. Coronavirus hit him hard. And if he didn't have cash reserves, credit options, and the right mindset, it might have totally wiped him out. When the virus hit, Josiah had 10 properties he needed to refinance. It was a perfect storm: His private money lender immediately pulled funds, his refinance bank changed their terms, and property values dropped—all at once—meaning he would need to bring way more cash to the table. What happened next? Listen to this episode to learn about how Josiah made it through the nightmare and came out on the other side... with more equity and reduced interest payments. Real estate investing isn't all sunshine and rainbows. But if you keep your mind right, plan your exit strategies, and maintain cash and credit lines, you too can survive the curveballs thrown your way. In This Episode We Cover: What happens when private lenders want their money back Why Josiah's bank changed the loan-to-value ratio on him Tapping a cash-out refinance in an emergency Trying to sell a property you had planned to BRRRR Taking out loans in your spouse's name to get around loan limitations Key to pulling off a BRRRR in a down market How Josiah saved $750K in interest over 30 years by getting a lower interest rate How an attorney can help you arrange a great partnership Why Josiah looks at this stressful time as a highlight of his real estate investing career And SO much more! Links from the Show BiggerPockets Forums David's Instagram BiggerPockets Podcast 234: Tenants, Evictions, & The Dark Side of No Money Down with Ryan Murdock Mindy Jensen's BiggerPockets Profile BiggerPockets Money Podcast Oculus Check full show notes here: https://www.biggerpockets.com/show382-5 Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	This is the BiggerPockets Podcast episode 382 part 2.
0:05.0	You may be thinking how did you come up with 200,000 bucks?
0:07.5	We didn't have that much money in reserves and we had kept one property completely paid for that we talked about long before this happened,
0:15.3	but what that is is that's insurance, that's reserves.
0:18.4	In the case that some kind of black swan crazy thing, crazy event happens. We can tap into that money that will
0:24.4	save us. So that's what ultimately got us through this.
0:27.0	You're listening to Bigger Pockets Radio, simplifying real estate for
0:31.7	investors large and small.
0:34.0	If you're here looking to learn about real estate investing, without all the height,
0:38.0	you're in the right place.
0:40.0	Stay tuned and be sure to join the millions of others who have benefited from bigger pockets.com.
0:46.1	Your home for real estate investing online.
0:49.3	What's going on everyone?
0:50.3	It's Brandon Turner, hosted the bigger pockets podcast here with my co-host Mr. David Green.
0:57.5	David, welcome to the podcast again, man.
1:00.2	What's going on?
1:01.2	Thanks Brandon.
1:02.0	It's been awesome.
1:03.0	I sold a flip that I was working on with a partner.
1:05.8	We did pretty good on that.
1:07.6	Each of us made money.
1:08.8	And then last week I put three buyer clients under contract, all house hackers,
	...

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