THE PERFECT BRRRR | Analyzing A Perfect Real Estate Deal
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- Опубліковано 30 вер 2024
- In this video I have Kellan Paniccia to break down and analyze a perfect real estate deal by breaking down an example of a PERFECT BRRRR with one of my wholesalers Mike Nowicki!
What do you think of the BRRRR Strategy? Have you used this strategy before? What do you think of Kellan's breakdown of an example of a PERFECT BRRRR?
Don't forget to leave Kellan & I a comment on what you thought of this video and any major takeaways you got!
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Matt McKeever is a CPA, CA and Real Estate Entrepreneur in London, Ontario. On this UA-cam Channel Matt discusses a variety or real estate and personal finance strategies and tactics. Including: How to BRRRR Real Estate, The Importance of Investing for Cash Flow, How to Reach Financial Independence Retire Early, Safe Withdrawal Rates, Frugality and Reducing Personal Consumption & Embracing Minimalism.
Matt began investing in real estate at age 25 by purchasing a student rental near Fanshawe College.
Thanks for having me on the channel, Matt! Hopefully it clears things up for some people - especially the Refinance part.
#numbers thanks this was very clear
Phenomenal content. Definitely more numbers and deep dives!
Great video!
Thank you so much for explaining the refinancing! Most just fly over that aspect. Can't wait to start this year. First timer here... love your channel. Thsnks a bunch
Awesome video. It clarified some things I had been hung up on for a while, and commented about just earlier today. Both of the guys were great. #numbers
#morenumbers for sure!
Who the heck is paying $3000 a month in rent for a 3 or 4 bedroom duplex? The 1% rule seems completely out of reach
Analysis was simple the understand but in the first 4 minutes when hes describing how to get the ARV and saying that lenders and appraisers would appraise based on rent worries me. In the states a residential (2-4) building is all based on nearby comparables and not in the income generated. I dont know how canada works but Ive never heard of lenders appraising and agreeing that your $200k house you just bought appraises for nearly $300k because you can get $3k/mo. in rents?? Wouldnt they just look at the 3 houses nearby that sold in the past 6 months for 260-280k and call it somewhere in that range even if you can prove youre getting $3k/mo?
What parameters do you set on the cashflow of your post brrrr properties after you refinance them? How much do you care about the cashflow after you brrrr our and are 0% in the property?
More number deep dives
With pictures of the properties and how you financed the property initially!
What about refinancing fees? isnt there a penalty for refinancing before the end of the term?
Best beard on UA-cam!
Thanks! 🙏🏻
Just a question, when you refinance with a new lender, do you take into account the cost or fees for breaking the mortgage with the old lender..didnt notice that in the calculations.. normally that's 3 months of interest on variable correct?
FIRST!
Ah, I was in Costco dealing with the mania 😂
@@KellanJames is there still toilet paper?
@@HungarianExperiment There was zero. They got a full shipment today, and it was already gone. I picked some up at the Sobeys next door haha - insane.
Honest Questions: Do you really think this housing price is realistic in almost anywhere in Canada (even whole sale)? if so do you not think it would need quite a bit more funds than 20K for the renovation/conversion for a house that would surly be in a low 200k condition. Maybe in a remote area, but would you be able you demand that amount for rent to make this flow (seems like larger town/city rent price, not remote area). Could you please do a example where a house cost 600K and needs 50k for renovation, and rent is $1600-1700? which would be a little more common outside GTA?
TIA
Hey Dee! The challenge with that would be the $1700/month rent on a $600k property, it wouldn't cashflow. We're always aiming for the 1% rule, so a $600k property would need to make $6000/month - which I can already imagine you saying "Pfffff!" haha. It's essentially impossible in some cities - so to BRRRR and cashflow when you're done after refinancing, GTA investors will have to leave the GTA in most scenarios.
Regarding the $20k reno - this would be a situation like a hoarder house. So $2k to remove/dump everything, $3k to paint, $4k for all new flooring, $5k for a new Ikea kitchen with a laminate countertop, and $6k for everything else. Perhaps a bathroom where the tub/tile can be refinished for $700 rather than gutted and replaced. Perhaps the flooring is hardwood that can be refinished. It's a very specific type of property, and it often takes awhile to find. That being said - I've seen dozens of people doing it each and every year, including 2020 - off-market deals well below market value are a huge help. Say that $217k property is actually worth $250k on the market - that means $33k was made on the purchase, and the other $50k of value comes from $20k of strategic renovations. Hope that helps - but you're right, these properties are rare!
Fantastic info and gives a very clear understanding!!
So glad that it was helpful!
I have 2 questions I have always been curious about. #1, When you go to the bank for a mortgage, do you get a variable so you can refinance soon after!? I'm always told to go Fixed to save on interest payments but curious as to how you would suggest it done. #2, Aside from offering Cash For Keys, what techniques do you use to replace the tenants with newer ones to increase cashflow and ultimately the value of the property, what do you do when the tenants don't want to leave?
#Numbers!!
Great explanation of BRRRR.
So glad you got value from it!
Hello I am 19 and live in Calgary AB, as my first real estate investment I am going to do a duplex for around $500k with 3.5% down (mixing house hacking and BRRRR), and then do about $100k/ the max i can do in renovations to match comps etc ($100k counting holding costs etc) and with that i will get a $700k-$775k ARV in which i will have $200k-$275k equity in the property but the problem is.... With a refinance of 80% LTV i will not even be able to pull out my full renovation money and of course as a sophisticated investor that has over 1000 hours of learning in the field i want/need to use a lender for the renovations... So with a 80% LTV i cant even get the full amount of the lenders money back on a refinance and ill have a massive $140k-$225k equity stuck in the property that i spent only about $60k of my own capital to get ie 225%-400% return in 6 months to a year. So my question is of course how do i get a LTV for like 90% or better yet the 96.5% that my loan originally is, it seems stupid that i can get it for 3.5% but need to refinance for 20%, and all i can find on this subject is that it is possible however very hard and it was only in reference to the USA i'm pretty sure, so if you know and actually read this does anyone know how it works in Canada and if its possible/ how to do it, this sadly ruins my unbelievably good plan of a 200%-500% return in 6-12 months....
Enjoyed shooting this! Thank Matt, kellan and the media team for making this!
Thanks for your help, Mike :)
Hahaha! “Does this kind of give you a free property?”
Kellan explained this better than anyone I’ve heard before.
#numBeRRRRs #numBeRRRRs
A really good explanation. pls keep up with this kind of analyzing deals videos.
Thanks, happy to hear that it helped!
I am in a unique situation where my landlord wants to sell the house to us that we are currently renting. Asking 287K however the appraisal we had done had it right at 500K which he thinks its value is around 325k. (He moved ten years ago so he's not aware of the neighbors on each side which have smaller homes, selling their homes in the mid 400's and is tired of having to manage the property.)
What should I do with that equity and how would I go about getting it? Should I buy and sale at 500k when I move or should I buy, refinance and reinvest, then rent it when I leave?
Buy it, wait a few months, and call for a refinance! Maybe paint and fix a few things. Or, close cash (with private funds) and then call a bank to get a mortgage on it! Right up to 80% LTV on the real value :)
Nice vid id like to se analyzing frome sart to finish on paper to lern all the math like the old school does maybe find a deal and go through ste by step and se if the deals make scene or not for us newbies to start anaylizing ourselves and start making DEALS thx
What's the best way to go about finding deals that fit the 1% rule? Here in Winnipeg I have just started looking the past couple months and I haven't seen anything that fits so far.
Great video! I have a couple properties but haven't done a refinance. Would you be purchasing the property and getting mortgage #1 with the same lender as the new mortgage a few months later? Or do you start with a private lender.. then go to a bank to refinance? Interesting in hearing opinions!
Both work! Oftentimes people get a better ARV if they closed privately and then got a mortgage later, but if you want to keep it simple, mortgage 1 and 2 with the same bank works just fine! Perhaps consider closing, painting a few things and basic fixes, and calling for a refinance.
Amazing!!! Thank you