This is exactly the strategy I'm doing now. Two single family homes at the same time on the same street. Started off with (short term) hard money loans. I'm currently on the refinance stage now. Bought both for 146k after about 130k in rehabs, evictions, taxes, fees and screw-ups. They cash flow and have about 80-95k of equity. I Love the BRRRR strategy!
Graham, do you know if banks typically require a seasoning period for properties purchased initially in cash? In speaking with a representative from my credit union while searching for properties they suggested a home equity line of credit might be a good way to go as a means of cashing out. Seemed similar in regards to rates for conventional mortgages but I've yet to see that approach mentioned online, any thoughts on that? Thanks
One thing I LOVE about your videos, is the examples. I love when you go through the math and numbers to explain a concept like refinancing. Thanks Graham, love the content! Keep it up!
Absolutely correct about the laminate flooring. I did it in our home and it was basically the selling point to the people. Its easy to do! I plan on doing it asap in our duplex
Freaking amazing. It's like a total domino effect - love it. I rent out bedrooms on a weekly frequency & I'm at the point where I literally forget that people owe me rent. It's often a surprise when then I receive money. "Wednesday already?"
In your scenario wouldn't you need to get your house appraised for 280K before you can refinance? What does appraisals normally cost, $500-$1000? Are you paying closing cost on both loans? Closing cost on 160k should be around $5,000 and closing on 280k is around $8,000 depending on your location, could be more or less. Depending on how long it takes to fix up the property and find renters, you'll have to make loan payments. On 160k loan $1,300-$1,500 depend on your taxes and interest rate. Multiply that by 3-4 months you're looking at $5,200-$6,000. appraisal- $1,000 160k closing cost $5,000 280k closing cost $8,000 Loan payments $6,000 Down payment $40,000 Renovation $30,000 total investment $90,000 Then you would need to pray the renovations were good enough to convenience the appraiser the house is worth 280K. I'm I missing something? I'm interested investing in real estate, but it can get really confusing.
Graham can you please address this? It is an extremely important concern. It separates the lofty mental conception of all of this from the reality of it.
It was a simplified example of course. First, the closing costs might be lower when you are a preferred client instead of a normal primary homeowner, and the refinancing on an existing mortgage may be cheaper. Second, you usually wait a few years before refinancing anyways, so you get some of the equity from mortgage payments. Third, most properties will usually have some existing tenants.
Not only was it a rudimentary example on purpose - but that risk falls on you. YOU have to do the research to figure out what renovations (if any) will give you the return you are looking for. This is done by looking at the market.
Graham..I love your vids. I really appreciate the education and transparency. You crank out content on the regular. I understand how much goes into these vids so again I really appreciate it. Keep at it.
Wow that you replied.....and that was fast. For sure! I have a huge mouth and will keep pushin your channel brotha!!! Thanks again. No reply necessary.
I love the BRRRR method. But I want to introduce the SHHH method. .....Graham, peeps are taking this strategic approach and the competition is killing me! Brrrrr! Bahaha! Awesome video btw.
I really appreciated how you upped the ante on your "I don't like to spend money in these issues" progression. Foundation issue (bad foundation) plumbing issue (water spraying everywhere) roofing issue (car in roof) electrical issues (Frankenstein's monster)
I bought my first home(1750 sq/ft log cabin) with over 2 acres at 18. I got it extremely cheap at a tax auction but I had to completely restore the home. I purchased the home for $21,000 and put another $10-15k into it, and it’s just about done now that I’m 20, but I’ve been doing the work myself and paycheck to paycheck. I would say I have $40,000 into it and the estimated value on the home is around $140,000. I know for a fact I could flip the home but I’m young and I have a house that’s paid for and all I have to do is pay my taxes. I definitely want to try it with another home after I save up some more money and see I can pull it off again and Maybe rent some out, but I have a lot to learn.
Not sure if you have covered this topic, but could you do a video about how to pick a good real estate agent and contractors for your BRRRR deals? Like what qualities and red flags do you watch out for when selecting a contractor and theoretically a real estate agent. Thanks Graham!
One of the best explanations of the Refinance section! That's the part newer investors struggle to get their head around, myself included. great graphics too.
Master Sensei Graham with another one ahah🙌. Thanks for all the practical and truthful knowledge you share on your channel! As I’ve once heard, it is more valuable to listen than to talk, and I can’t listen enough. Most of your viewers are young, as am i, and you are educating us more than you’d believe!
currently doing this, surprisingly successful. bought my first cash flowing property 312k refinanced now evaluated at 392k and was able to get 23k out which is a decent portion of the downpayment on my next one. refi both in 5 years and i can buy big
Hey graham this is a year ago maybe you wont see this, but i really want to ask you these 1)if you are at a single family house, can you legally lease out all other parts of the house assuming you have separated entrance for tenants and live in a small room of it. Can you consider all rent revenue part of your income, how long do you have to wait 2) when you refinance and ending up borrowing more money wouldnt the bank require you to have more income from work 3) when you “do it again” will the bank see you already have a mortgage in your name, and but your job only covers your current mortgage, then they denied you for your second house? Im watching all your videos from the beginning and smashing that like button!
It seems like every upload is exactly what I want to ask lol. Thanks for the videos brother. Starting to own a home in SF with my family. Rare for us natives. Itd be great if maybe you can give me more advice. Thanks again!
This method has been highly talked about and its exactly what I will be doing for my next deal. Its a great combination of a fix and flip and buy and hold
The first is definitely the toughest, it's getting that initial down payment and learning that takes some time - but after the first and second, it's smooth sailing.
Hey gram! Love your stuff! Can you do a super detailed video on how to calculate a good deal vs a bad deal. Like go all the way into your mindset. How you calculate how much you’ll need how much you’ll get, the time for renovations so on so fourth. Just a super detailed video of your mindset
I have watched quite a few of your videos and you are always giving great tips and ur videos have my type of sarcasm. But one tip that can help your audience and it's really amazing actually. Benefits for veterans. I am making 3k a month going to school full time for free with the gi bill and I'm about to use a VA home loan which requires no down payment..amazing monetary benefits for veterans. Maybe bring that to light sometime. Its doubled my income the past 2 years going to school investing it. Getting the foundation of wealth planted! Keep up the good work
Thank you so much! I filmed this one super early in the morning before work, not sure if anyone noticed I wasn't quite as caffeinated as my other videos, haha
This method seems very clever. It gets you out of a negative net worth just like that simply because you put the loan from the appraisal down on the house plus cash flow and you can just keep going.
Think this is harder than people make out. Graham is skilled at this, is in the US where can get a 30 year fixed loan. It's not that risky for him. Variable interest rates could kill your cash flow, I need a buffer greater than 20% equity + buying costs + renovation costs to feel comfortable. Doable but need patience
BRRRR strategy is KEY! It helped me get to 5 properties in my first year - recycling your money an re-investing quickly is so powerful. No plan on stopping, this strategy is hard to beat, especially if you can get 100% of your money back out of a deal and get infinite ROI.
How do the banks know the value of the house? What do they look for that determines the overall value of the property? Do you have a video on that? I don’t think I’ve seen a video on your channel regarding that topic. Thanks for all the free information graham!
Thank you I’m 27 and I’m in the process of getting my own property soon, very soon and these videos help and I already was thinking of putting lameinent
Thanks for the video Graham! Have you done one yet about what limitations exist on how many properties you can buy as an individual, and how to expand one's investment business beyond that point?
Graham i just wanted to say a massive thank you to you for investing into people like me and helping give us the tools to create wealth. Even though we never met i consider you an awesome mentor and am currently 19 y/o saving to get enough money to invest with. I live in the UK and would like to move over to the US in my mid 20s. My question was should i solely focus on saving money for as long as possible until i can afford the down payment and renovations on a property or are there other investments which i should looking at making along the way. Also what would be a strong saving goal to use as capital to invest in a property? Either in dollars or Pounds since i will eventually move to the US.
Thank you so much! There are definitely other investments you could make along the way but it just depends what your goal is. If it's real estate, then save up for real estate. I pretty much just saved everything and dumped it all into property when I had enough, then everything else came second (IRA, 401K, etc). As for a savings goal, it depends - but I'd aim for 20% of the cost of the property + money for renovations + having an emergency fund for anything unexpected that comes up (and it will)
Graham Stephan thanks a million for the fast response. Means the world. What price region of housing should I be looking at for a first property or should I just save and hunt the deals when they pop up. Also is it worth holding out on investing until I move to the US from uk as I'd imagine it'd be a waste to invest in London only to move
Amazing stuff Graham. Could've explained the refinance part a bit more clearly though, in terms of the renovation costs being seen as an investment as equity in the home.
Yeah, prices are getting pretty ridiculous here, too. It's still doable to invest, but it takes a LOT of searching and a TON of patience to find the right deal.
Or you can get a hard money loan to buy, rehab, and rent, the refinance into a traditional mortgage, pay off hard money loan and repeat. You should check out some of biggerpockets books, like no or low money down ;)
That's what I keep wondering. With these bigger loans all the time the repayments will be high. With all the additional costs on top like insurances, taxes and maintenance. How do you cover the payments and still make any money? 🤔
I'm assuming by having a larger down payment so you have more equity, and therefore lower monthly mortgage payments. Factor in all of the taxes, insurance, etc and find your total monthly bill. Then rent out your property to cover your total monthly bill with some profit on top. But im assuming alot of homework has to be done to find the right property in the right area that would allow for cashflow, so you don't overprice the amount of rent you charge. And so alot of research would have to be done before even buying the property. This is what I've picked up at least, from all of Graham's videos. I could be totally wrong, not an expert here but someone who hopes to invest one day.
Rule of thumb is the property should rent for 1% of the purchase price. EX: $120,000 house/multi family should bring in 1,200 a month in rent. 80,000 house brings in $800 a month etc..
@Rajeev Vij I believe is just a rule of thumb investors try to stick by for the numbers to make more sense when it comes to positive cash flow. But in your case Is not that the property is "undervalued" Is just that the rule cannot be applied to everything. The higher the price of the house the harder it is to stick to that rule of thumb. For the simple reason that even though house value can affect rent, ultimately rent is rather regulated by the area/rent market. If you really want to know the value of that property, look at what other homes in the area that fit the same criteria are selling for. But the true question is...is the home paid off? if not, are you getting positive cash flow? is mortgage + bills covered and you are left with a couple hundreds in your pocket? if so, then you win more in all aspects long term.. best to analyze all this before buying the property.
This was a great video graham. I'm 19 and interested in getting into real estate to start a passive income flow. Gonna be going to Afghanistan with the army for 12 months that will generate tax free income. Hopefully I'll accrue a large enough amount of capital that I can start when I get back.
Hi Graham, I'm currently working as a property manager and have been working in the industry for the past 5 months. I am currently in a position where I feel like I could no longer continue working for the company as I am handling too many properties. I know that you haven't had the same experience as you started as a sales agent, and have continued to build your career from the ground up. I am not sure if I wanted to continue with this career path as I feel like an admin assistant who is continually dealing with questions, complains and fixing things within a strict deadline. I love the industry because it is a great opportunity to learn about investing. I am currently 22 and I have watched many "career" related videos which encourages people to follow their passion and work hard to achieve success. However, I feel very conflicted about continuing this job as I dreaded to go to work each day. What are your thoughts on this, Graham?
I'd talk with them first about your thoughts of being overwhelmed and see if there's a middle ground where you can enjoy your job a little more, continue making money, and continue learning. Otherwise might be best to look for other options, other companies, or consider looking into seeing if you can start your own property management company? Or at least work for yourself?
its alot of work but i love the sound of everything and i love that lotus in the background i see some asians over here where i live in canada that look like they are completely KILLING the real estate game driving lambos and ferraris like its casual
Got it, Tha'ts a great strategy. This is why I listen to you. I learned that if you have some equity in the house you can refinance it to save money on the APR building up on the loan.:)
Graham - this is a great walkthrough of the BRRR method. It's been great to see your channel grow over time. Question though- How much approximate time between each step? Particularly the Refinance and Repeat step. I guess this varies depending on appreciation curves?
At 6:50 your new loan would increase by $64,000, so why did you consider it as an increase in money? Doesn’t that mean you have another extra $64,000 to pay off? I’m new to this so I’m kinda confused right now, so refinancing is a way to get you the cash which you could use to pay the down payment of the next home, but you’ll still have to pay the $64,000 back in the long run as mortgage? Any replies would be greatly appreciated
The example he’s using is a good one, original home price 200k put 30k in it, 40k down. That’s 70k. So all together 230k. Get it cash flowing, appraised and boom 280k, cash out refinance 224k. 64k difference after using the 224k to pay off the 160k debt. Don’t sell property. Use 64k cash to buy another property. If he dicided to sell that one. He would get capital gains of 50k. 280k - 230k. 50k gains. Cash flow property plus have a good equity property. If you was going to use 64k on next property, then you gotta come out of pocket renovation costs then repeat.
With this method, it can snowball into a real estate empire!! And all you'll need is the down-payment for the initial home purchase and maybe some money for the repairs correct?
NoPlace4U 10 traditional bank mortgages. You can find a “portfolio lender” (usually a smaller local bank) who holds their loans in house and doesn’t sell them. You can do unlimited mortgages with them with the right relationship
Easy. Buy a house cash for 60k, renovate additional 30k. You're now at 90k. Rent it. After 6 months, get appraised. Get a loan for 75% of that appraisal. You get your 90k back. Repeat the same steps.
Extra tip: get your license, represent yourself on the deal, and use that commission from your deal towards renovations. :)
How much does that cost though ??
Currently what I'm doing 👍🏽 great advice
Graham said he got his license for $300
In Canada you’re not insured if you represent yourself in a deal. Leaves too much open to go wrong. Bad advice
@@BKNb77 I dont remember exactly but I think something like that applies here in California also.
This is exactly the strategy I'm doing now. Two single family homes at the same time on the same street. Started off with (short term) hard money loans. I'm currently on the refinance stage now. Bought both for 146k after about 130k in rehabs, evictions, taxes, fees and screw-ups. They cash flow and have about 80-95k of equity. I Love the BRRRR strategy!
Nice!!
Love the BRRRR! Awesome to get to see Graham's take on it!
Thanks so much man, it was your BRRRR video that inspired me to make my own version!
Love it the BRRRR!
I was about to comment "Matt McKeever would love this" but then scrolled down and saw this :P
Yessss Matt, BRRRRing up a storm in London!
Graham, do you know if banks typically require a seasoning period for properties purchased initially in cash? In speaking with a representative from my credit union while searching for properties they suggested a home equity line of credit might be a good way to go as a means of cashing out. Seemed similar in regards to rates for conventional mortgages but I've yet to see that approach mentioned online, any thoughts on that? Thanks
One thing I LOVE about your videos, is the examples. I love when you go through the math and numbers to explain a concept like refinancing. Thanks Graham, love the content! Keep it up!
Thanks so much!
I’m disappointed. I really thought the first step was to smash the like button.
Absolutely correct about the laminate flooring. I did it in our home and it was basically the selling point to the people. Its easy to do! I plan on doing it asap in our duplex
Freaking amazing. It's like a total domino effect - love it. I rent out bedrooms on a weekly frequency & I'm at the point where I literally forget that people owe me rent. It's often a surprise when then I receive money. "Wednesday already?"
Haha isn't that the best?!
Great meeting you last weekend! Love the filming setup
Thanks so much man, lets for sure keep in touch!
In your scenario wouldn't you need to get your house appraised for 280K before you can refinance? What does appraisals normally cost, $500-$1000? Are you paying closing cost on both loans? Closing cost on 160k should be around $5,000 and closing on 280k is around $8,000 depending on your location, could be more or less. Depending on how long it takes to fix up the property and find renters, you'll have to make loan payments. On 160k loan $1,300-$1,500 depend on your taxes and interest rate. Multiply that by 3-4 months you're looking at $5,200-$6,000.
appraisal- $1,000
160k closing cost $5,000
280k closing cost $8,000
Loan payments $6,000
Down payment $40,000
Renovation $30,000
total investment $90,000
Then you would need to pray the renovations were good enough to convenience the appraiser the house is worth 280K. I'm I missing something? I'm interested investing in real estate, but it can get really confusing.
I have the same questions as you do..How would the appraiser give $280K value after renovations and what if they don’t give that value?
Graham can you please address this? It is an extremely important concern. It separates the lofty mental conception of all of this from the reality of it.
im also trying to figure that out
It was a simplified example of course. First, the closing costs might be lower when you are a preferred client instead of a normal primary homeowner, and the refinancing on an existing mortgage may be cheaper. Second, you usually wait a few years before refinancing anyways, so you get some of the equity from mortgage payments. Third, most properties will usually have some existing tenants.
Not only was it a rudimentary example on purpose - but that risk falls on you. YOU have to do the research to figure out what renovations (if any) will give you the return you are looking for. This is done by looking at the market.
Only creator that I've ever seen mention a seasoning period. Subscriber for life now ✅️
Graham..I love your vids. I really appreciate the education and transparency. You crank out content on the regular. I understand how much goes into these vids so again I really appreciate it. Keep at it.
Thanks sos much Matt!
Wow that you replied.....and that was fast. For sure! I have a huge mouth and will keep pushin your channel brotha!!! Thanks again. No reply necessary.
You explain it so simple, dumb it down and actually give great examples. LOVE IT
Thanks!!
It's Friday, watching finance clips on youtube while I'm drunk, it's fun. I can't say anything 5 times right now. :)
Your Friday sounds lit AF
Just say Beer 5 times, that’ll do
I love the BRRRR method. But I want to introduce the SHHH method. .....Graham, peeps are taking this strategic approach and the competition is killing me! Brrrrr! Bahaha! Awesome video btw.
Hahahaha 😂
I really appreciated how you upped the ante on your "I don't like to spend money in these issues" progression. Foundation issue (bad foundation) plumbing issue (water spraying everywhere) roofing issue (car in roof) electrical issues (Frankenstein's monster)
🙌🏼
I bought my first home(1750 sq/ft log cabin) with over 2 acres at 18. I got it extremely cheap at a tax auction but I had to completely restore the home. I purchased the home for $21,000 and put another $10-15k into it, and it’s just about done now that I’m 20, but I’ve been doing the work myself and paycheck to paycheck. I would say I have $40,000 into it and the estimated value on the home is around $140,000. I know for a fact I could flip the home but I’m young and I have a house that’s paid for and all I have to do is pay my taxes. I definitely want to try it with another home after I save up some more money and see I can pull it off again and Maybe rent some out, but I have a lot to learn.
Not sure if you have covered this topic, but could you do a video about how to pick a good real estate agent and contractors for your BRRRR deals? Like what qualities and red flags do you watch out for when selecting a contractor and theoretically a real estate agent. Thanks Graham!
I keep coming back to watch this, just so I fully understand the concept and can apply it. Can't wait to have the money for my first multi-unit!
Did you buy your first multi-unit?
@@noxau5153 not yet, still in school but once I graduate and start saving I'll get the cash together for a purchase
One of the best explanations of the Refinance section! That's the part newer investors struggle to get their head around, myself included. great graphics too.
Thanks!!
Master Sensei Graham with another one ahah🙌. Thanks for all the practical and truthful knowledge you share on your channel! As I’ve once heard, it is more valuable to listen than to talk, and I can’t listen enough. Most of your viewers are young, as am i, and you are educating us more than you’d believe!
Thanks so much man, seriously means a lot!!
currently doing this, surprisingly successful. bought my first cash flowing property 312k refinanced now evaluated at 392k and was able to get 23k out which is a decent portion of the downpayment on my next one. refi both in 5 years and i can buy big
Hey graham this is a year ago maybe you wont see this, but i really want to ask you these
1)if you are at a single family house, can you legally lease out all other parts of the house assuming you have separated entrance for tenants and live in a small room of it. Can you consider all rent revenue part of your income, how long do you have to wait
2) when you refinance and ending up borrowing more money wouldnt the bank require you to have more income from work
3) when you “do it again” will the bank see you already have a mortgage in your name, and but your job only covers your current mortgage, then they denied you for your second house?
Im watching all your videos from the beginning and smashing that like button!
It seems like every upload is exactly what I want to ask lol. Thanks for the videos brother. Starting to own a home in SF with my family. Rare for us natives. Itd be great if maybe you can give me more advice. Thanks again!
Thanks so much for watching man!! :)
hey man you should do more renovation videos ! I love seeing the progress and how it nice the property ends up being ! loving the vids btw
Great video Graham! You always have great content and been watching your videos daily for a while now
thanks!!
This method has been highly talked about and its exactly what I will be doing for my next deal. Its a great combination of a fix and flip and buy and hold
It's just that first property that you have to get under your belt... :P that's the tricky part!
The first is definitely the toughest, it's getting that initial down payment and learning that takes some time - but after the first and second, it's smooth sailing.
Graham Stephan great advice Graham BRRRR is a great method to build wealth!
Buy somewhere where the property is cheap like most of the South East. I got a house for 17k when I was 21.
In a good area too.
You must have bought a box
Hey gram! Love your stuff! Can you do a super detailed video on how to calculate a good deal vs a bad deal. Like go all the way into your mindset. How you calculate how much you’ll need how much you’ll get, the time for renovations so on so fourth. Just a super detailed video of your mindset
Yeah, I want to do this!
I’m 16 and use your vids to help me plan my future.
AMAZING! :)
Just SMASHED!! that Subscribed button after so many vids! Lol Really good info Gram! 🖒
Thanks so much!
I have watched quite a few of your videos and you are always giving great tips and ur videos have my type of sarcasm. But one tip that can help your audience and it's really amazing actually. Benefits for veterans. I am making 3k a month going to school full time for free with the gi bill and I'm about to use a VA home loan which requires no down payment..amazing monetary benefits for veterans. Maybe bring that to light sometime. Its doubled my income the past 2 years going to school investing it. Getting the foundation of wealth planted! Keep up the good work
this is an incredible video. appreciate the advice Graham!!!
Great explanation of this method, nice and to the point. 10 min or less videos is where the money is at.
Thanks so much!! I agree, I try to keep them between 10-15 minutes!
Great lighting in this video buddy!!
Thanks!!
super exhausted and graham's notification pups up
who the hell gonna miss it
Notification Squad FTW!
Graham, this is one of my favorite videos
Thank you so much! I filmed this one super early in the morning before work, not sure if anyone noticed I wasn't quite as caffeinated as my other videos, haha
Best video I have ever watched 👌🏻
Thank you so much!
This video is GOLD!
So, so, so freaking awesome!!!!!!!!!!! The BRRRR is a game changer!!!!!!!!!!!!!!!!!
This method seems very clever. It gets you out of a negative net worth just like that simply because you put the loan from the appraisal down on the house plus cash flow and you can just keep going.
Think this is harder than people make out. Graham is skilled at this, is in the US where can get a 30 year fixed loan. It's not that risky for him. Variable interest rates could kill your cash flow, I need a buffer greater than 20% equity + buying costs + renovation costs to feel comfortable. Doable but need patience
Dont tell me who or what to "smash" Graham I do what I want!!! Sidenote great video as always been here since 55k subs
haha thanks so much!! really appreciate all the support :)
Like always, thanks for the advice Graham. You covered everything 👌🏾
🙌🏼
BRRRR strategy is KEY! It helped me get to 5 properties in my first year - recycling your money an re-investing quickly is so powerful. No plan on stopping, this strategy is hard to beat, especially if you can get 100% of your money back out of a deal and get infinite ROI.
Are you at 5 already?! WOW!
6 as of tomorrow haha, closing on another triplex. 18 units :)
My favourite video yet !!!
Thanks so much!
"Woah ..." - Me when you blew my mind at "$64k cash at closing"!
How do the banks know the value of the house? What do they look for that determines the overall value of the property? Do you have a video on that? I don’t think I’ve seen a video on your channel regarding that topic. Thanks for all the free information graham!
EdVentures banks use an appraisal that is based in comparable sales.
Great advice like always 🙏👌
Thanks so much!
You know youre OG when you drive a Lotus
Lotus is the GOAT
LOVE LOVE LOVE all of this amazing FREE information, you’re seriously awesome, thank you so much! 👏🏻
Thanks so much man!
you explained that really well. thanks!
This video is awesome man thanks for breaking this strategy down!
Thanks for watching!
Love ur videos man love from canada
Thank you I’m 27 and I’m in the process of getting my own property soon, very soon and these videos help and I already was thinking of putting lameinent
🙌🏼
You're the man Graham!
🙌🏼
Thanks for the video Graham! Have you done one yet about what limitations exist on how many properties you can buy as an individual, and how to expand one's investment business beyond that point?
This video is a gem! Thank you!
Love the explanation very clear and understandable. Thanks for the tips planning on investing in real estate this strategy could come in handy. Bless.
Graham i just wanted to say a massive thank you to you for investing into people like me and helping give us the tools to create wealth. Even though we never met i consider you an awesome mentor and am currently 19 y/o saving to get enough money to invest with. I live in the UK and would like to move over to the US in my mid 20s. My question was should i solely focus on saving money for as long as possible until i can afford the down payment and renovations on a property or are there other investments which i should looking at making along the way. Also what would be a strong saving goal to use as capital to invest in a property? Either in dollars or Pounds since i will eventually move to the US.
Thank you so much! There are definitely other investments you could make along the way but it just depends what your goal is. If it's real estate, then save up for real estate. I pretty much just saved everything and dumped it all into property when I had enough, then everything else came second (IRA, 401K, etc). As for a savings goal, it depends - but I'd aim for 20% of the cost of the property + money for renovations + having an emergency fund for anything unexpected that comes up (and it will)
Graham Stephan thanks a million for the fast response. Means the world. What price region of housing should I be looking at for a first property or should I just save and hunt the deals when they pop up. Also is it worth holding out on investing until I move to the US from uk as I'd imagine it'd be a waste to invest in London only to move
Deacoyy u got an update?
Amazing stuff Graham. Could've explained the refinance part a bit more clearly though, in terms of the renovation costs being seen as an investment as equity in the home.
I love real estate investing videos!
Thanks so much man!
Where can I learn about buying the right property I live in he LA area and everything is extremely expensive
I’d speak with an experienced real estate agent in the area you want to buy in, and they’d be the best resource!
Thanks! I've been binge watching your videos over the last few days lmao
Tay here buddy watching now!!
Yo, thanks so much for watching!
WWWWHATS Up you guys! Love it
🙌🏼
Love it man! Makes a lot more sense now. Is this the only method you use?
Thanks Chris! Yeah, this is pretty much what i'm doing!
Great vid mate, I'd be all over real estate if Melbourne prices weren't ridiculous haha...I'll stick to the stock market for now.
Yeah, prices are getting pretty ridiculous here, too. It's still doable to invest, but it takes a LOT of searching and a TON of patience to find the right deal.
Great video! Could you go over some of the risk in this method during economic downturns and how you would handle that?
Awesome video buddy
THANKS!
Great video ! In your next video can you talk about comercial real estate like buildings, hotels, etc. I’m learning a lot from you ! Thanks
I dont know enough about those unfortunately :(
No its obviously buying youtubers courses....
Does your mom know you're using her GTR for videos and stuff? Doesn't she mind?? I wish I had rich parents like you!!! ;)
Graham Stephan I thought you were making a your mom joke for a second lmao
Heya shitify drop shopper
Graham Stephan: renovate by yourself, you will have fun!
Also Graham: shows 2 (latino?) contractors doing all the hard work LOL
Why does their race have to deal with it?
FYI you can get around the seasoning period by using a commercial loan. I know pros & cons, but just another tool for everyone.
Let me just get the extra $70,000 I have in my back pocket for this method
Lol quit buying Starbucks and work a little more. Obviously you aren’t gonna become a millionaire off of pocket change. Be real brotha
Or you can get a hard money loan to buy, rehab, and rent, the refinance into a traditional mortgage, pay off hard money loan and repeat. You should check out some of biggerpockets books, like no or low money down ;)
Improve your credit score, work to have good debt to income rations and go ask the bank... That's kinda what they do.......
@@KelechiIkegwu0Good comment, exactly what I do.
Get an FHA loan. You can buy a 300,000 dollar home for 9k down
Hi Graham,
This is a great strategy. I wonder if this is possible to do in Mexico.
Cheers Rich
Seen a couple other comments like this but please go on the Bigger Pockets Podcast
I'd love to do that!
no
Bigger Pockets was the people who created the BRRRR strategy.
They didn’t create it, but they did coin the phrase “BRRRR”
Hey graham can you do a video on how to make sure your rent covers mortgage and all the expense and what not. Like go into detail
That's what I keep wondering. With these bigger loans all the time the repayments will be high.
With all the additional costs on top like insurances, taxes and maintenance.
How do you cover the payments and still make any money? 🤔
I'm assuming by having a larger down payment so you have more equity, and therefore lower monthly mortgage payments. Factor in all of the taxes, insurance, etc and find your total monthly bill. Then rent out your property to cover your total monthly bill with some profit on top. But im assuming alot of homework has to be done to find the right property in the right area that would allow for cashflow, so you don't overprice the amount of rent you charge. And so alot of research would have to be done before even buying the property. This is what I've picked up at least, from all of Graham's videos. I could be totally wrong, not an expert here but someone who hopes to invest one day.
Rule of thumb is the property should rent for 1% of the purchase price. EX: $120,000 house/multi family should bring in 1,200 a month in rent. 80,000 house brings in $800 a month etc..
@Rajeev Vij I believe is just a rule of thumb investors try to stick by for the numbers to make more sense when it comes to positive cash flow. But in your case Is not that the property is "undervalued" Is just that the rule cannot be applied to everything. The higher the price of the house the harder it is to stick to that rule of thumb. For the simple reason that even though house value can affect rent, ultimately rent is rather regulated by the area/rent market. If you really want to know the value of that property, look at what other homes in the area that fit the same criteria are selling for. But the true question is...is the home paid off? if not, are you getting positive cash flow? is mortgage + bills covered and you are left with a couple hundreds in your pocket? if so, then you win more in all aspects long term.. best to analyze all this before buying the property.
This was a great video graham. I'm 19 and interested in getting into real estate to start a passive income flow.
Gonna be going to Afghanistan with the army for 12 months that will generate tax free income. Hopefully I'll accrue a large enough amount of capital that I can start when I get back.
Thanks man! And thank you for your service!
Great information you share!! So inspired by this video ❤️it
THANKS1
This video is going in my blue Rey collective collection.
Hi Graham, I'm currently working as a property manager and have been working in the industry for the past 5 months. I am currently in a position where I feel like I could no longer continue working for the company as I am handling too many properties. I know that you haven't had the same experience as you started as a sales agent, and have continued to build your career from the ground up. I am not sure if I wanted to continue with this career path as I feel like an admin assistant who is continually dealing with questions, complains and fixing things within a strict deadline. I love the industry because it is a great opportunity to learn about investing. I am currently 22 and I have watched many "career" related videos which encourages people to follow their passion and work hard to achieve success. However, I feel very conflicted about continuing this job as I dreaded to go to work each day. What are your thoughts on this, Graham?
I'd talk with them first about your thoughts of being overwhelmed and see if there's a middle ground where you can enjoy your job a little more, continue making money, and continue learning. Otherwise might be best to look for other options, other companies, or consider looking into seeing if you can start your own property management company? Or at least work for yourself?
I want to get into real estate investing one day. Great money to be made!
Agreed!
its alot of work but i love the sound of everything
and i love that lotus in the background
i see some asians over here where i live in canada that look like they are completely KILLING the real estate game
driving lambos and ferraris like its casual
JmansFragments yes, I’m Asian and I live in Toronto and I was thinking the same thing. Lol I need to get with the program.
lool kill it brotha whenever you do
im voting for you
Excellent video.
Thanks for the BRRRR explanation!
You got it!
Got it, Tha'ts a great strategy. This is why I listen to you. I learned that if you have some equity in the house you can refinance it to save money on the APR building up on the loan.:)
Thanks so much!
Amazing content!!!
THANKS!
Graham - this is a great walkthrough of the BRRR method. It's been great to see your channel grow over time. Question though- How much approximate time between each step? Particularly the Refinance and Repeat step. I guess this varies depending on appreciation curves?
Honestly I’d wait 6-12 months per property. And between each step, it couldn’t be a few weeks to 3 months depending on how in depth it is.
At 6:50 your new loan would increase by $64,000, so why did you consider it as an increase in money? Doesn’t that mean you have another extra $64,000 to pay off? I’m new to this so I’m kinda confused right now, so refinancing is a way to get you the cash which you could use to pay the down payment of the next home, but you’ll still have to pay the $64,000 back in the long run as mortgage? Any replies would be greatly appreciated
Steppin up Gaming but is on equity right?.
Thanks, this is a pro tip!! 😊😊
Love your work boss man ❤❤
Thanks Jack!
Great method for buying real estate. Shout out to Brandon Turner. BiggerPockets.
🙌🏼
Refinancing sounds to good to be true so the equity is liquid and you buy another house with it. Thanks 🙏
George: 10 minute BRRRR Method
TLDR: Property Development
No Seasoning period with a private money lender!! I'm scaling quick!!
When I saw Brrrr i thought it was the sound of an A-10 XD
Biggerpockets FTW!!!
I was surprised you didn't say the first step was to smash that like button... I did it anyway ;)
The example he’s using is a good one, original home price 200k put 30k in it, 40k down. That’s 70k. So all together 230k. Get it cash flowing, appraised and boom 280k, cash out refinance 224k. 64k difference after using the 224k to pay off the 160k debt. Don’t sell property. Use 64k cash to buy another property. If he dicided to sell that one. He would get capital gains of 50k. 280k - 230k. 50k gains. Cash flow property plus have a good equity property. If you was going to use 64k on next property, then you gotta come out of pocket renovation costs then repeat.
With this method, it can snowball into a real estate empire!! And all you'll need is the down-payment for the initial home purchase and maybe some money for the repairs correct?
And money to cover the mortgage payment while you are renovating.
Empire or crash and burn because you picked the wrong properties and just helped pump the next bubble
At best you can only have 10 mortages.
NoPlace4U 10 traditional bank mortgages. You can find a “portfolio lender” (usually a smaller local bank) who holds their loans in house and doesn’t sell them. You can do unlimited mortgages with them with the right relationship
Easy. Buy a house cash for 60k, renovate additional 30k. You're now at 90k. Rent it. After 6 months, get appraised. Get a loan for 75% of that appraisal. You get your 90k back. Repeat the same steps.
Buying a house for 60k cash...easy. Lol
It's Gordo Well, start saving. 😉
Graham it would be amazing if you creating real estate investing classes going over every step and inconveniences as well as real estate agent courses
I have real estate agent courses :) check the description!! One day I’ll get into investing courses!