I actually think refinancing the property after you have the tenant is a good thing because thats what the banks want to see. It also offsets your debt to income ratio. I think the fact that the property took 12 months to rehab is what threw everything off. And yea, having 6 months of reserves saved up is a must have💯💯💯
Excellent video from a real person implementing this strategy. You're real life experience is invaluable to others. People don't realize that most people on UA-cam explain the BRRR strategy but won't give you the details cause they want you to come to one of their conferences, or buy their book.
Outstanding video 1) 65cents on a dollar for purchase and renovations 2) Rent estimates from property managers (go with the lowest for no surprise) 3) Always over estimate renovations 4) Line up the exit before getting a renter DSCR loans if you forget number 4. Just make sure that ratio is 1.25% or better (for example all the expenses is 1000 (mortgage applying for, taxes, insurance, property managment fees, etc) and the rent is 1250. The property has a 1.25% ratio. The higher the better. 2% is like doubling money. Again, awesome video
I have heard many horror stories of people not estimating the repairs properly. It happens all the time. An investor told me that is where you can lose it all, even if your got a killer deal on the property itself. Yes, you make your money on the purchase, but you can lose it all with the rehab. Thank you for making that public knowledge.
Omg thank you for being humble enough to admit your mistakes! This is a blessing. I have truly learned a lot from your mistakes. You are blessing to so many people! God is going to bless you abundantly. All the best to you.
Using simple numbers Cost of house $50k Rehab $50k Arv $300k 75% is $225k. 225-100k(rehab/purchase) = 125k. This additional $125k, is it yours or do you technically have to pay that back as well? People will say that they will walk away with a check at times for x amount of money. But is that money actually yours or is it supposed to get paid back?
That sounds hair-raising. Thanks for sharing your experience. NO one talks about all this stuff!! I'd love to hear a LOT more about what can go wrong, and all to avoid. I'm so glad you saved your house! P.S. In a pinch, ould have hard gotten a SECOND hard money loan, to tide you over while you were working on a traditional cash out re-fi with the bank?
Loved n noted every advice n suggestion of yours to the point !! Sorry u had to learn it hard way but appreciate your time for this video to make it easy for newbies. THANK YOU.
Thank you for being completely honest on your mistakes. So glad it worked out for you in the end. Blessed day to you. Keep doing what your doing. There is a blessing in every lesson.
@@VBtheRealEstateStrategist how can I reach out to you. Are u interested I. Investing into me . I'm a newbie investor that's trying to get into real estate
So true on those numbers, after 29 years I've seen it's a few times. Few joint ventures have gone over due to not fixing and staying within the budget. This is where discipline comes in to cash out on the deal.
There’s too many video about making quick profit in Real estate. Thanks for keeping it real. There’s a lot of pitfalls, gurus can lead people into huge trouble.
Thanks for this video! I've completed major rehabs on principle residences and on my long term rentals, but I'm going to finally try the BRRRR method this coming year. It was good to hear about the process.
Relatable with the rehab costing more and it coming out of your pockets!! Thanks for the transparency. Need real gems and solutions for real problems/obstacles!! Subscribed!
The BRRRR has a lot of variables but just like anything else there is a risk. I’ve done well with it but like he said there are a lot of things that can go wrong. And the variables are constantly changing so all of this has to be accounted for during the entire process.
It would be great if you could do a series on the brrrr strategy, from start to finish. How you search for a property, how you find a hard money lender, from estimating repairs to finding tenants to cash out refi. Also from when your started not at this point where you are established. Thanks in advance for your time.
When it comes to renovation expect to spend more when you budget for. Hire good contractor and buy materials that are meant for rental properties and not spend on high end materials.
How do people manage rehabs from afar? Getting eyes on the property before purchasing is one thing, but watching construction everyday is tough for those investing in areas further away.
Thank you so much for this video! You answered a lot of my questions that I had. I’m very grateful that you are helping us by taking the time doing this. I pray you continue to be successful. Thank you!
Yo this is only the second video of yours I’ve watched and I greatly appreciate the real perspective detail you provide. I subscribed after the first video about being vandalized because that same shit happened to me so I was able to empathize with what you were saying. This BRRR vid gave me something that I haven’t found in any of those bigger pockets books. Non of them ever talk about the mistakes which important to know so that we learn. I needed this badly because I wasn’t confident in executing a cash out refinance. Much appreciated.
Real real video. This is the real things that are happening. Not these ez pzee deals these people show on their channel. these are the mistakes newbies make. Maybe the experienced guys do do it easier.
Trying to get approved for a HELOC right now so I can start messing with flips and brrrr properties. Thank you for the video and sharing your honest experiences. Helpful to get as much input as I can and 90% so far has been on UA-cam lol
I did the same thing be careful what bank you use. I got approved for my heloc with a 680 credit score but won’t let you use that equity for a down payment on an investment property unless you have a 740 credit score.
Great video! Thank you so much for your honesty. I had a question, if anyone can answer, will the 65 on the dollar include interest, closing costs, real estate commission cost during renting? Are there any out of pocket expenses that should be expected in the BRRR strategy that the loan will NOT cover. Also when working with a hard money lender, do most fund the project 100% without any money down?
Super insightful advice! No sugar-coating it! Btw if you are ever looking for off-market, distressed properties in the Houston, TX area, feel free to hit me up-I move about 50/month 🤝
You make money when you buy. Just like flipping and then refinance instead of selling it. BRRRR numbers are the same that you would have for a flip. A BRRRR house also has to be flippable. Problem is people do not do their research and run the numbers. If you contact any lender or do a simple Google search, people will see that you need between 20% and 25% to get a loan for a rental property. Also you can get a contractor to provide an estimate (even if you have to pay for it) to give you the cost for the renovations.
If you doing flips or a rental houses you don’t need a realtor just to market my dad has five rental properties he didn’t get no sales agent or anything
THANK YOU SO MUCH The property looks SO good even with just the windows added it made the exterior look like it had been repainted already!! I’m interested in understanding how you decide on your exit strategies ie: the new property you showed you say you are fixing up to sell, but the other property you did BRRR (even though you took an L) you kept instead of selling. Reason I am asking is because I think I would have panicked and looked for an opportunity to sell...which may not be beneficial... based off of the decision you made.
Good stuff. I like to hear from real people and not just TV personalities. Just one comment though about your ordeal. I think one year for renovating a house is pretty long. Were you doing the work yourself? The people I’ve been following try to get everything done in 90 days at the most six months (for 2000sqft). I think if you would’ve knocked it out well ahead of time you could’ve got a tenant in there and exited With lots of space in front of you.
Awesome videos! Thanks for taking the time out to help us rookie investors! You mentioned a HML you frequently do business with, would you mind sharing who?
Great content, lots of nuggets here... love the transparency. Great to know what to expect from banks that will refinance the property even before we buy it! Couple of questions... I’m a newbie 😅 Do you use business credit cards at all, to help with renovations? Also, when running the numbers for rental, I learned you need to consider not only mortgage, but also property taxes, 5-7% vacancy, 10% for future expenditures, 10% property management if you are gonna hire a company... and after all that is discounted from rent, make sure it cash flows at least $200 per door/unit. Much success to you!
@@VBtheRealEstateStrategist Are you producing Documents for this interest rate? Tax returns, banks statements. Every No Doc lender ive seen want 6% at minimum .
Everyone tell you the good part of the brrrr. Thank you so much for sharing all of it, the good, bad and Ugly. I really appreciate your transparency
I actually think refinancing the property after you have the tenant is a good thing because thats what the banks want to see. It also offsets your debt to income ratio. I think the fact that the property took 12 months to rehab is what threw everything off. And yea, having 6 months of reserves saved up is a must have💯💯💯
Yeah, the inefficient rehab is what killed the deal.
6 months of rehab ?
Excellent video from a real person implementing this strategy. You're real life experience is invaluable to others. People don't realize that most people on UA-cam explain the BRRR strategy but won't give you the details cause they want you to come to one of their conferences, or buy their book.
Outstanding video
1) 65cents on a dollar for purchase and renovations
2) Rent estimates from property managers (go with the lowest for no surprise)
3) Always over estimate renovations
4) Line up the exit before getting a renter
DSCR loans if you forget number 4. Just make sure that ratio is 1.25% or better (for example all the expenses is 1000 (mortgage applying for, taxes, insurance, property managment fees, etc) and the rent is 1250. The property has a 1.25% ratio. The higher the better. 2% is like doubling money.
Again, awesome video
I have heard many horror stories of people not estimating the repairs properly. It happens all the time. An investor told me that is where you can lose it all, even if your got a killer deal on the property itself. Yes, you make your money on the purchase, but you can lose it all with the rehab. Thank you for making that public knowledge.
Love your honesty and transparency in the video. Thank you for your knowledge and I wish you many more successful Doors!
This is super helpful. Appreciate your transparency throughout this particular deal.
Thank you for being so upfront with us and sharing your mistakes that we are making right now. You are amazing 😻
Omg thank you for being humble enough to admit your mistakes! This is a blessing. I have truly learned a lot from your mistakes. You are blessing to so many people! God is going to bless you abundantly. All the best to you.
A smart man learns from his mistakes. A wise man learns from the mistakes of others... Great job.
Lots of great tips. We did an accidental BRRR. Luckily came up on top. Now planning properly
This information you have given in this video is GOLD!!!! Your integrity is REFRESHING!
Thank you so much 🙏🏾
Good info. I’ve also experienced some of these challenges.. especially the rehab estimate challenge. Must get a good set of contractors
Using simple numbers
Cost of house $50k
Rehab $50k
Arv $300k
75% is $225k.
225-100k(rehab/purchase) = 125k. This additional $125k, is it yours or do you technically have to pay that back as well? People will say that they will walk away with a check at times for x amount of money. But is that money actually yours or is it supposed to get paid back?
That sounds hair-raising. Thanks for sharing your experience. NO one talks about all this stuff!! I'd love to hear a LOT more about what can go wrong, and all to avoid. I'm so glad you saved your house! P.S. In a pinch, ould have hard gotten a SECOND hard money loan, to tide you over while you were working on a traditional cash out re-fi with the bank?
Thanks for this I am getting ready to buy my first property its definitely more to it than I thought
That herringbone backsplash needs some love , thank you for breaking your experience down my boy 👍
Loved n noted every advice n suggestion of yours to the point !! Sorry u had to learn it hard way but appreciate your time for this video to make it easy for newbies. THANK YOU.
Thank you for being completely honest on your mistakes. So glad it worked out for you in the end. Blessed day to you. Keep doing what your doing. There is a blessing in every lesson.
You are 100 percent correct. The stress level goes up quick when money flows out. Thanks good info for newbies.
thanks for the comment King
Thank you so much for the transparency ❤️ this has been my fear. I have learned a lot!
i
Those are some rough lessons you learned. I really appreciate you sharing your experience though. Thank you! 🙏🏾
most sensible video on real estate in this era of tik tok fakeperts . Keep up the good work man. Cheers.
Thanks so much!
It took me 9 months to find my first one, I watched this after I bought but luckily I followed most of your tips, amazing video!!
💪🏽
@@VBtheRealEstateStrategist how can I reach out to you. Are u interested I. Investing into me . I'm a newbie investor that's trying to get into real estate
So true on those numbers, after 29 years I've seen it's a few times. Few joint ventures have gone over due to not fixing and staying within the budget. This is where discipline comes in to cash out on the deal.
There’s too many video about making quick profit in Real estate. Thanks for keeping it real. There’s a lot of pitfalls, gurus can lead people into huge trouble.
Just watched your video. Thank you for a real life experience and making me understand more sir!
FACTS!! This is what they don't say!! You are definitely more prepared watching this video that others don't mention. Appreciate you!!
Thanks for this video! I've completed major rehabs on principle residences and on my long term rentals, but I'm going to finally try the BRRRR method this coming year. It was good to hear about the process.
Appreciate the transparency and showing the risks involved. Subscribed
This wasn't an L at all because this video is helping a lot of people win. Thank You!
Relatable with the rehab costing more and it coming out of your pockets!! Thanks for the transparency. Need real gems and solutions for real problems/obstacles!! Subscribed!
First, last and deposit plus 18month lease are what I heard for other investors to ask renters. Never compromise.
The BRRRR has a lot of variables but just like anything else there is a risk. I’ve done well with it but like he said there are a lot of things that can go wrong. And the variables are constantly changing so all of this has to be accounted for during the entire process.
Thanks for your showing and all your advice during video TY!
Lots of videos on this topic. This is one of the best. Thanks for all the honest insight and none of the hype. Much appreciated! Great job.
It would be great if you could do a series on the brrrr strategy, from start to finish. How you search for a property, how you find a hard money lender, from estimating repairs to finding tenants to cash out refi. Also from when your started not at this point where you are established.
Thanks in advance for your time.
Hi check out our recent videos, thats exactly what were doing. new videos coming soon!
Thanks for being honest.......
Peace King.....
How’d you get a tradition mortgage if it’s not your primary residence?
When it comes to renovation expect to spend more when you budget for. Hire good contractor and buy materials that are meant for rental properties and not spend on high end materials.
How did you get a traditional mortgage on this property if you needed rehabs? I heard that was supposed to be hard money
How do people manage rehabs from afar? Getting eyes on the property before purchasing is one thing, but watching construction everyday is tough for those investing in areas further away.
Good stuff. Being a realtor, I’m glad to have a little knowledge on the market once I start this process. Thanks for the insight!
They're no houses in California at 100-150k so my question is this possible in Ca?
A lot of BRRR investors end up being upside down because renovation costs are hard to gauge up front
You never what's going on with a place until you peel those walls back, and don't run into a BS sub contractor they'll always kill you
Thank you so much for this video! You answered a lot of my questions that I had. I’m very grateful that you are helping us by taking the time doing this. I pray you continue to be successful. Thank you!
Brother man, please apply visual aids when it comes to the numbers. Thank you.
In the BRRRR 🥶 book state you have to have a team set up for the rebuilt of the property waaay before you look in to property’s to buy!!!
Yo this is only the second video of yours I’ve watched and I greatly appreciate the real perspective detail you provide. I subscribed after the first video about being vandalized because that same shit happened to me so I was able to empathize with what you were saying. This BRRR vid gave me something that I haven’t found in any of those bigger pockets books. Non of them ever talk about the mistakes which important to know so that we learn. I needed this badly because I wasn’t confident in executing a cash out refinance. Much appreciated.
Much respect to your hustle and thanks for the support. I'm glad you find my videos helpful!
What was renovation cost for the house in this video ? I saw lot of stuffs to fix
That 65% rule was crucial , Thxs for the knowledge
We all learn the most when we fail or spend more than we thought. Keep learning. I am .
Real real video. This is the real things that are happening. Not these ez pzee deals these people show on their channel. these are the mistakes newbies make. Maybe the experienced guys do do it easier.
Good info, and thanks for the transparency
Love the transparency.......
thanks!
thank you!
Trying to get approved for a HELOC right now so I can start messing with flips and brrrr properties. Thank you for the video and sharing your honest experiences. Helpful to get as much input as I can and 90% so far has been on UA-cam lol
I did the same thing be careful what bank you use.
I got approved for my heloc with a 680 credit score but won’t let you use that equity for a down payment on an investment property unless you have a 740 credit score.
It is a good idea to do inspection/walk thru with your general contractor so that you have the spend and the time frame.
This video is inspiring brother!
Great video! Thank you so much for your honesty. I had a question, if anyone can answer, will the 65 on the dollar include interest, closing costs, real estate commission cost during renting? Are there any out of pocket expenses that should be expected in the BRRR strategy that the loan will NOT cover. Also when working with a hard money lender, do most fund the project 100% without any money down?
Wow! Great information, people charge for this type information. Thanks for being transparent for us little guys.
Last I heard it was 85 percent refinance in Texas.
Great video man keep up the good work 👍 don't feel disconfident this is a good learning process.
Why the bathroom is o small ?
Where you got money to buy it? Hard lender?
Great advise!! Very helpful..
So would you suggest getting the construction company you use to come out for a estimate before you buy???
Great information...Thank you!!
very clear and informative brother thank you
Who do you use as a hardmoney lender?
Can we use a regular lender for this strategy like Rocket Mortgage or some other lender?
Thank you for your transparency!
Super insightful advice! No sugar-coating it! Btw if you are ever looking for off-market, distressed properties in the Houston, TX area, feel free to hit me up-I move about 50/month 🤝
Great content. I had to add an addition to a property to get it to cash flow well out here in California. What market is this in?
You make money when you buy. Just like flipping and then refinance instead of selling it. BRRRR numbers are the same that you would have for a flip. A BRRRR house also has to be flippable. Problem is people do not do their research and run the numbers. If you contact any lender or do a simple Google search, people will see that you need between 20% and 25% to get a loan for a rental property. Also you can get a contractor to provide an estimate (even if you have to pay for it) to give you the cost for the renovations.
Wow just found your tube channels today and you are dropping jems 🙌🏽 thank you so much for your honesty
Thank you for watching!
Good stuff man!
If you doing flips or a rental houses you don’t need a realtor just to market my dad has five rental properties he didn’t get no sales agent or anything
Thank you for posting this video.
Beautiful building
THANK YOU SO MUCH
The property looks SO good even with just the windows added it made the exterior look like it had been repainted already!!
I’m interested in understanding how you decide on your exit strategies ie: the new property you showed you say you are fixing up to sell, but the other property you did BRRR (even though you took an L) you kept instead of selling. Reason I am asking is because I think I would have panicked and looked for an opportunity to sell...which may not be beneficial... based off of the decision you made.
Thank you for sharing. Even your estimate was too high. Do you feel that way now? I may not have taken that deal if the estimate for reno was 100.
Good stuff. I like to hear from real people and not just TV personalities. Just one comment though about your ordeal. I think one year for renovating a house is pretty long. Were you doing the work yourself? The people I’ve been following try to get everything done in 90 days at the most six months (for 2000sqft). I think if you would’ve knocked it out well ahead of time you could’ve got a tenant in there and exited With lots of space in front of you.
What type of loan do you have for this project if it’s not form hard money FHA 203k loan?
real talk...appreciate it
Awesome videos! Thanks for taking the time out to help us rookie investors! You mentioned a HML you frequently do business with, would you mind sharing who?
Are you from Baltimore? I'm in Maryland and looking to talk with someone from the Maryland Area.
Great advice and lessons learned.
Great video.. thanks!
Thank u so much for a lot of info
You are in my area, are you interested in mentoring? I have my first property but I'm stuck.
Yup our mentorship begins January 1st
Hi from Virginia! We have 4 properties in the area, nice video 😻
I am in Virginia and looking to buy our first property ! 🤝
This is the video I've been looking for
Great content, lots of nuggets here... love the transparency. Great to know what to expect from banks that will refinance the property even before we buy it!
Couple of questions... I’m a newbie 😅
Do you use business credit cards at all, to help with renovations? Also, when running the numbers for rental, I learned you need to consider not only mortgage, but also property taxes, 5-7% vacancy, 10% for future expenditures, 10% property management if you are gonna hire a company... and after all that is discounted from rent, make sure it cash flows at least $200 per door/unit.
Much success to you!
Business loans are cheaper than business credit cards. It is about a 10 percentage point difference. Great info…thanks!
Great video! Let me ask you this... If you went in with all cash would you say you would have avoided some of these struggles?
very helpful bro. Thank you for sharing this valuable info
How can I contact you
This video was perfect for me, so many GEMS!! Thank you brother , I just subbed.
Whats ur city, 3k renting? Crazy
Is this in Pigtown?
So do the banks check your credit for cash out refinancing ?
Yes, they sure do
What is a fair interest rate on the cash out refi? What are some good banks that will offer a cash out refi?
Anywhere around 3-4% is good. But cash flow is most important so make sure whatever interest rate you get, make sure the home cash flows
@@VBtheRealEstateStrategist Are you producing Documents for this interest rate? Tax returns, banks statements.
Every No Doc lender ive seen want 6% at minimum .
@@justrealestate1087 no I was referring to a traditional bank with 20% down. But you’re correct, A no-doc loan will run you 6% and up