Surviving When the BRRRR Hits the Fan with Josiah Smelser (Part 2, Post-Coronavirus)
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
Check full show notes here: https://www.biggerpockets.com/show382-5