How to Fail at The BRRRR Method | 4 Steps to Avoid

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The BRRRR method is undoubtedly one of the greatest (and fastest) ways to build wealth through real estate investing. Even if you’re brand new to real estate, you’ve probably heard someone talking about the BRRRR strategy in some form before. While this strategy can easily be explained in five simple steps-buy rehab rent refinance repeat-the reality of doing a BRRRR is less than simplistic most of the time.
Trust Tarl Yarber on this. As a recovering flipping addict, Tarl realized well into his 500th deal that solely flipping houses wasn’t a wealth-builder, but BRRRRing was. So, did he do his first BRRRR property perfectly? Of course not! But, instead of watching rookies fail on their own, Tarl has been kind enough to provide us with his four steps that will ensure a failed BRRRR, specifically so you DON’T do them.
If you’ve ever attempted a BRRRR before, you’ll probably see a few familiar steps on this list that you accidentally did. Before you buy that beautiful fixer-upper and turn it into a rental, make sure you’ve got your exit strategies in line and you’ve mitigated all of these four risks!
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Check out Tarl’s Video on The “Infinite BRRRR Strategy”:
• The “Infinite BRRRR St...
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Buy the Book on BRRRR Investing:
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Prequalify for Your Next BRRRR with a Great Lender:
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Calculate Your Future BRRRR Profits:
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5 Smart Exit Strategies For When Things Go Wrong Flipping Houses:
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@tarlyarber or / tarlyarber
00:00 How to Fail at BRRRRing
01:00 What is The BRRRR Strategy?
02:29 1. Put in The Wrong Finishes
05:29 2. Get a Low Appraisal
09:33 3. Don't Get Prequalified
16:18 4. Be a Bad Landlord
19:41 What Happens if You Do All Four?
21:07 Plan Your Exit!

Опубликовано:

16 июл 2024

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Комментарии : 116

@DCC72 Год назад

Here's 3 reasons this guy may be the most gifted BG teacher: 1) he knows when you could have been confused . Notice when he gives $100k example, he clarifies it's a new example. 2) he never leaves any concept incomplete and yet is concise. Notice how he says "buy crappy Property " which is the most efficient way to teach the "B" . 3.) He writes down his concepts which form his outline. Like Ken McElroy (who is great but makes mistakes). All in 20 mins. This guy is gifted BRRRR teacher. I learned it well.

@gettz196 2 года назад

Excellent, excellent advice . Especially the part where RU-vidrs etc make it seem like BRRRR is an easy strategy to do . Maybe pre C-19 but not now in my experience .First you have , sellers prices high . Then materials are high . Contractors are over charging . Then don’t forget the closing costs , the operating cost ( utilities, insurance, payments to hard lender if that’s what you are using interest only ) until you refinance , then another closing cost . Unless you have a renter first month after the closing covering all these cost . Meaning you did the rehab in 2/3 weeks ( unlikely) . Then after all that , hope the appraisal comes in your favor , where 70 to 75 % of the ARV was your total cost including expenses… A lot of videos are misleading and make it seem like you can do this with no to low money . No you need money and hopefully after all that you can make all of your money back from fore mentioned expenses . Very difficult. Maybe I’m not “ in the know “ but deals are hard to find . Any markets with the example he used , please let us all know lol .

@brucebarber8323 2 года назад

A brrrr is just an under valued house. They are everywhere. Google whole salers in my area. Or contact home owners do all the homework and offer them a price that mAkes the deal work. Then call 30 other houses because it’s a numbers game. Low income neighborhoods are full of these homes. I’m currently doing this strategy on a duplex that a whole saler found. Should be done and on to the next one in 2 month

@bikenraider99 2 года назад

Always good to hear about failures and how they happened and some.of the solutions to get out of them. Thanks for posting.

@Acollins33 2 года назад

This is one of the best videos about brrrr I’ve seen, thank you!!

@rashidbeisenov 2 года назад

One of the greatest, short and straight to a point vids about brrrr. Thanks for your effort and teaching 👍

@Andradi303 2 года назад

Thank you for sharing pitfalls and being real about what to do and NOT to do! Super helpful!

@JevonMusicGroup 2 года назад

Ingenious way to reinforce the BRRRR strategy! Never thought of that first one... so glad I watched this.

@RIB0S0ME 2 года назад

Nice summary at the end. Love the list and the advice to start on top.

@brian4555 2 года назад

I can listen to this man all day. Great delivery!

@newprop9658 2 года назад

I want to start a wave of trying to get you back on a bp podcast. It always seems the people who are actually ten toes down don't have the time, but one can hope. Always great stuff yarl

@petervendetti2796 2 года назад

Great job man I like your RU-vid lessons Some people can’t teach you do a good job Some people think their contractors and get surprised when they’re not. I’ve done three houses so far I’m gonna electrical contractor the stress is tremendous. When you’re trying to do everything yourself and don’t have the skills

@Lovingmylife24 Год назад

I appreciate you all sharing the other side of this strategy. It is good to also see that this does not always work.

@hangarnut5660 2 года назад

Simply thank you! The market will level out as it has always done.

@laurenbreslin6125 2 года назад

Very informative! Thank you from this first time real estate investor 😄

@jameshull7693 Год назад

this is a great video to watch if you want to get into this market! funny and very knowledgeable!

@vha0589 2 года назад

Thank you. Great video.

@MrFrancesconi 2 года назад

Great video! Thanks!

@emilioalvarado-alanis8229 Год назад

Thank you very much for all your knowledge!!

@luo6963 Год назад

This was great. Thank you.

@l.a.6522 Год назад

Beautiful... im gonna listen to it again and take notes... im planning on doing a firs BRRRR... thanks...

@jamescline7877 2 года назад

Great advice....Thanks!

@Progressionmusic1 2 года назад

Great video!

@bionicspuds4616 5 месяцев назад

I needed this! Brought me back down to earth before I even started the brrrr strategy 😮

@bldfinancial 2 года назад

Great insights in this video 🔥

@Apsaramain 2 года назад

LOVE. Thank you!!!

@algarcia32 2 года назад

I always invest flip grade materials into my rentals. If I ever need to sell or want to sell, all I have to do is paint the inside and I should be able to sell it to an owner occupant rt away.

@janicevo5756 2 года назад

Greatest advice. "WORK BACKWARD".

@davidprice2206 Год назад

dude you're goated !! excellent job on all of this

@MaPrajna1 Год назад

This was a great video. Thanks

@jyouboty83 Год назад

Great Stuff, Thanks!!!!

@banaya6973 Год назад

Very detailed and insightful. Txs

@arslanchaudhry9458 2 года назад

Thank you!

@waterfoker8558 3 месяца назад

Excellent breakdown

@taye9424 2 года назад

thanks tarl!

@LoneVocalist Год назад

One of the best if not the best video from BP

@five-forty3431 6 месяцев назад

Great informative video!

@morganstubie Год назад

This video is amazing!!!.!! Hilarious and packed w knowledge!!!

@CRISKILLA1 2 года назад

Probably the best video on the internet.

@MegaSuperEnrique 2 года назад

#4 how to find good tenants -I have a duplex that I find tenants for, if they are good, I offer to upgrade them to one of my BRRR, I may even find a BRRR with them in mind, and eventually offer to sell them the property.

@sftrail4235 2 года назад

Thank you. all make sense

@Topics_on_the_Edge 4 месяца назад

What a great video!

@deshawnburton2290 Год назад

Thank you

@toddtowns7793 Год назад

Loved it

@jackiphone3g 2 года назад

So If you do flip grade finishes you are kind of safer. Better tenant and better appraisal… just have to make sure you buy it correctly so you have the buffer to make those finishes.

@tylermundy7985 2 года назад

Tarl Yarber is the man!

@travelmikey9 Год назад

Funny approach to educating on the topic :👏

@krystofpilisiewicz1154 Год назад

I love this guy. He is funny as hell, and smart

@takeitback-financial2808 2 года назад

Such a great video to show some realistic problems. Everyone makes it seem easy and it’s a lot of work and nothing goes to plan. Especially on the rehab part.

@chihoolee 2 года назад

Great video! I think if ppl are reading David Greene's BRRR book, they should also watch this.

@masseywillingham2740 Год назад

Knocked this one out of the park Tarl. The only other thing I hope people who did not make it through 2008 realize is that valuations do go down and banks can call a loan when it’s no longer at an 80% LTV.

@jakemillerdoesmoney 2 года назад

I’m hoping to try my first non live in brrrr this year so great tips!

@5256brkboyz12 2 года назад

Everyone is making money and these vids on the pop of this strat. But your the first I’ve seen to go through the challenges. Thank you. I have been saving up for about 1 1/2 years now because I want to start buying real estate to rent. I’ve got as of right now 80,000 saved up in the bank so I guess we’ll see how it goes

@5256brkboyz12 2 года назад

I don’t know if you’re going to see this or not but I really do appreciate it I have my goal set on using the bar strategy for 10 properties then paying them off as fast as possible with the snowball method so hopefully in about 15 years all Tim properties will be paid off and I won’t have to do conventional work anymore work anymore

@Proctic51 9 месяцев назад

@5256brkboyz12 Hey any update to your investing journey?

@Hammeredveracity 2 месяца назад

Did you do it?

@gianrenepadilla3671 Год назад

Could you buy cash and finance after renting? Would that give us cash out assuming the appraisal is favorable (LTV is equal to initial cash & rehab costs)? In short, would we be able to receive cash back by financing after a cash purchase?

@joeydefaria4941 2 года назад

If you were debt free and had good credit, would you use your VA loan first before doing your first BRRRR? Or Vice versa? Also Cash purchase deal and financing rehab.

@ckkendrick7861 Год назад

Make sure you add your down payment when you cash out refi

@CovrXL5 7 месяцев назад

Thanks for a great vid ! Quick question. Do you think it's important to get a real estate license to do well with BRRRR?

@lvteachme973 2 года назад

Perfectly presented! Concise, easy to understand. You have explained many financing options and management considerations that are often not discussed.

@vic6010 4 месяца назад

How do you calculate rents based on the new refinanced mortgage since the payment of mortgage would go up right? Is there a method to calculate how much rent to charge to make sure we can cover ourselves when we refinance?

@cwebbhouston 2 года назад

I've done 5 BRRRRs, and every single one of them was a home run. You have to have an earned income job and your debt to income ratio can't be off.

@robertsavello4120 2 года назад

Can't be off what? What Debt to Income ratio is a good one?

@cwebbhouston 2 года назад

@@robertsavello4120 can’t be above 50

@robertsavello4120 2 года назад

@@cwebbhouston thanks

@leahholmes9928 Год назад

Can you just refinance into a DSCR loan?

@sergioblanco4504 Год назад

I think it’s very important to buy a property correctly from the start. In my opinion and after running lots of numbers for potential brrrr properties, I believe you have to buy the property with at least 50% under the value of the property. For example, if the value of the property is $500,000, you should look at purchasing with a purchase price of 250k. That’s how if seen it’s the easiest way to see if a property is good for this method or not. This means that the properties should bd acquired via Auction or pre-foreclosure. What do you guys think?

@dn3772 Год назад

how the hell u gonna buy a property for 50% off?

@Thejasonrogers Год назад

Buy, Reno as if you were selling so you can get more for the refi, cash out, rent, repeat.

@freespirit2520 Год назад

GREEEEAAAAT VIIIIDDDEEEEOOOOO!! GEMS!!! THANKS A LOT.

@nickfazzio5277 2 года назад

Never mind the BRRRR strategy here, my man has flipped 500+ properties…. It sounds like that’s where his gift is.

@jaygames7145 8 месяцев назад

Yes but he realized that he wasn’t building wealth or passive income when just flipping houses.

@user-sx1uc8pf7o 2 месяца назад

Where do you get money to put into it?

@rauljaimes6739 2 года назад

Can you do this with a VA loan?

@kylemckiernan1445 9 месяцев назад

Brrrr is so great, even if you leave money in a deal, you're likely getting more equity than what you leave PLUS have a cash flowing property

@MrPeterschmit 2 года назад

Okay, as far as being a bad landlord, where do we draw the line between raising rents and rewarding prompt payments by not raising rent ? Anyone?

@doctorleohealth 2 года назад

At 9:00 you said you have to borrow 8 grand to leave into the house? If it is a cash out refi and I've created equity through rehab, why do I need to add more money into it to get a refi? I think you mis spoke. If not , please clarify

@dinerochaser1100 Год назад

Advice for someone without income to get a property. With or without option for co-signer

@TheAceMoneyShow 2 года назад

Can you get a dscr loan for the refinance of the property? Edit- Wow 13:00 he mentioned it 😂 Watch whole video guys.

@Justise 2 года назад

I have tried to work all my BRRRR deals backwards, but I keep getting stuck. I go to repeat and then I repeat it but then I'm back at repeat... it's really a never ending loop. I've been analyzing my first deal for the last 11 years now...

@tarlyarber 2 года назад

Ha!

@Mmvexxx 2 года назад

How much can you typically pull back out in a refi? 70%? 80%? I’m planning on buying in Texas. I have a property that I’m interested in. Planning on buying cash, fixing it up and renting them doing a refi. I have excellent credit and plenty of cash

@flippineddy627 2 года назад

Not even joking here, but I had a home fire on a property that didn't have no HO insurance. Would you be interested in investing in reno for a % return from home sale on top? Have your lawyer draft up a contract. Property is paid off. Worth 295k for move in condition. I can show you the gofundme and local fire station Facebook profile that contains the pictures. I just need help

@flippineddy627 2 года назад

I have one more dumpster coming in 2 weeks and it will basically be ripped down to the bones from where damage occurred. My credit took a big hit over the past 6 months and I don't want to sell it for crackhead prices

@kenmarquis5320 2 года назад

I love Tarl's lessons, but we gotta get him off the marker board 😆. I don't mean this as an insult! But I feel like that would clarify and speed up and shorten his talks.

@tarlyarber 2 года назад

Ha! Yep, my hand writing sucks

@kenmarquis5320 2 года назад

@@tarlyarber 😄 just as long as you took the joke.

@maikaimakena9424 2 года назад

Public SERVICE announcement 📣

@djcook Месяц назад

you sound like Woodysgamertag

@serioushamster 2 года назад

It seems BR^4 hinges on the appraisal after the rehab being much higher than the money you put into the rehab.

@KiraBKADestroyerOfWorlds 2 года назад

So basically, begin with the end in mind.

@zack8247 2 года назад

yes that is what he said

@raymondweaver2023 2 года назад

This should apply to most (if not all) aspects in life.

@steeve3386 Год назад

What does point one mean? 1) is an infinite BRRR???

@lovelinksmusicbratta8610 2 года назад

You didn't mention failure to add enough value.

@jasonfulton2154 2 года назад

That's was essentially all of step 1 and 2

@axaflaxar 2 года назад

When u refinance won't you end up with a higher interest rate on the new loan and less cash flow

@youtubecarspottersguide1 2 года назад

how does one qualify for the loan ? no cash flow while you are rehab the house , so I have to personally make the paymnet

@mikebevan1034 2 года назад

You rent prior to the refi.

@dennisdanielsen8741 8 месяцев назад

super content. but guys, whats with the camera angle? xD

@kylekotecha153 2 года назад

Is this ok: Paid 220k for duplex Needs 30k rehab Arv 280k Rental comps: 1350 each side

@ckkendrick7861 Год назад

You put 20 percent down

@andersongeorge459 2 года назад

I have about 5% of my portfolio in uranium stock any advice on any other stock that I can grow my $300k capital to a million dollars?

@lescobrandon8162 Год назад

7:47 What’s a comp?

@biggerpockets Год назад

A "comp" is comparable properties to your own. Check out our video all about comps! ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-zEXQ7uaiGfA.html

@davidadamson3664 4 месяца назад

....or the tenant stops paying.

@CloudFly99 Год назад

This doesn't work in every market

@garciavashchino1 2 года назад

20:21 Murder, Burn the place, Gas Leak, Kidnap... just to name a few ideas.... I mean... J/K

@Adrian-yi8fl Год назад

😂 yeah I could crash my car into a light pole or drive off the cliff. But that doesn't mean I'm not going to go to the store.

@4homemail Год назад

Good advice. You better have a nice job and a good credit score or you will be doing the FUBAR strategy 😢

@charliesizemore9971 Год назад

You flipped 600 houses? Sure you did.

@brianbordenkircher52 2 года назад

Thank you!