BRRRR Deal Breakdown - infinite ROI & free houses in Beacon Hill, Seattle
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- Опубліковано 15 вер 2024
- Want to add $155,000 to your net worth in 10 weeks? Buy, Renovate, Rent, Refinance, Repeat! "BRRRR" is a great strategy to conserve & recycle your cash in a buyer's market. In today's case study, Michael walks through how his off-market BRRRR added $155k to his net worth & returned nearly 100% of his initial investment to him after refinancing!
"BRRRR" is an acronym for a real estate investment strategy that stands for Buy, Rehab, Rent, Refinance, and Repeat. This strategy is used by real estate investors to build long-term wealth by acquiring properties, fixing them up, renting them out, refinancing them to get cash back, and using that cash to repeat the process and acquire more properties.
The first step, "Buy," involves finding a distressed property that can be purchased at a discount. The second step, "Rehab," involves renovating and repairing the property to increase its value. The third step, "Rent," involves finding tenants to generate rental income.
Once the property is rented out and has increased in value due to the renovations, the investor can move on to the fourth step, "Refinance," which involves taking out a new mortgage on the property based on its new, higher value. This allows the investor to get back the money they put into the property and use it to invest in more properties.
Finally, the last step is to "Repeat" the process by finding another distressed property, rehabbing it, renting it out, refinancing it, and using the cash to buy more properties.
The BRRRR strategy can be a very effective way for investors to build a portfolio of income-generating properties over time, while also leveraging their investments to maximize returns. However, it requires a lot of hard work, research, and a strong understanding of the local real estate market.
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Awesome video! I loved seeing the numbers on this brrrr
We loved seeing those numbers too :). Even better than we projected.
Nice work Michael and Jessica! Very clear spreadsheet presentation . Are you renting by the room on this one ?
Thanks Elizabeth! This one is a standard 2 unit rental - 3 bed 1 bath main house and 1 bed 1 bath garage ADU. Although rent by the room is more profitable, we're at a stage in our investing journey where we're prioritizing simplicity and easy management over maximum cashflow, so most of our units are now whole house rentals, not rent-by-rooms.
@@househackseattle ahh so by whole house does that include the ADU? and if so what are you getting for rents?
We're not leased up yet, but asking $2600+Utilities for the main 3 bed and $1100 for the studio ADU.
love it Michael. is 20K about what you see to add a ADU/DADU in the greater Seattle area? and does it involve converting a garage to a 1 bed, add 1 bath, kitchen?
This project was renovating a garage that was converted into an ADU about 15 years ago, so that budget was for renovations (new paint, new flooring, new lighting, and adding a kitchen) not necessarily a new-ADU conversion.
@@househackseattle what is a good rule of thumb for how much it costs to convert ADU/DADU? I have heard varying estimates from 15k per 1bedroom ADU to $100/sqf (both sources come from investors in Puget Sound area), wonder what is your experience.
@@quantran7590 if you’re doing a brand new 700-1,000 sq ft basement (2-1) with full permits $70k - $115k. If it’s a conversion without full permits or part of the space is already finished I could see it going as low as $15-20k.
Rules of thumb are tough though when plumbing and electrical are involved- so much depends on location of utilities and layout!