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For the past 9 months I have been listening to and reading BiggerPockets material to learn how to generate wealth using real estate. Based off of what I have learned I think the following course of action is the best possible way for me to get started in real estate given my age of 19 years old (aka no credit and little money). Does this BRRR plan sound solid?:
1)Find an investor who would double as a source of money for down payment and a cosigner
2)Use an FHA loan (3.5% down if I live in a unit) to buy a quad-plex
3)Use the 203k aspect of the loan to improve the quad-plex and force appreciation in the property
4)Refinance in a year or two to a regular loan and pull equity out to either pay off my outside investor or use equity for another down payment on another quad-plex
With this plan, I believe I will be able to cash flow from day one because I will be able to rent out three units to college students around campus who are willing to pay higher rents than most. Along with the refi after a year or two, I would save up the cash flow to buy another property or contribute to the down payment to get to 78% LTV as fast as possible to avoid PMI and to be able to qualify for a regular loan.
Based on everything I know, this plan seems to be the most efficient way to acquire as many units as possible in the shortest amount of time, but again I am fairly new and don't know all the possible options. Any thoughts and suggestion on what the best plan of action for me is?
Freshman at the University of Northern Colorado
Majoring in Finance, Mathematics, and Economics
Goals: Acquire cash flowing real estate assets and
start a successful real estate company within six months.