I just completed my very first brrr deal and it came out infinite with an extra 100k cash in pocket and it still cash flows $1500 a month. It's crazy. Still can't wrap my head around how amazing this system is.
@@literalsarcasm8455 it was for a full duplex. Refinancing was quite simple - I put on a second mortgage (apparently I am allowed to have 3 mortgages on a property).
@@bn1011 Which state? Sounds like California if you’re going from 540K to 910K. I think I should be going this route rather than moving into bigger houses to house hack. What rate did you get for your mortgage?
DADU……Thank you for giving me a cool name for it. I found a property in Tx with a detached property and I thought…another rental piece. Now I’ve got DADU. Love it all!!!!
This was amazing. Thank you for taking the time to do these. I’m new in the industry and scared but excited. I’m in the education stage so this was great! Thanks again!
18:20 You are 100% correct on this. If you have Structural issues go to a Designer instead of a Contractor first. And always always go to a contractor that was referrred by someone wo actually did their home not the contractors you get in the Mailbox or billboards!!
Great content, keep these style of videos coming! Could you guys make a video that focus more on renovation finishes and budgets for flip grade level and rental grade level?
Great informative video. Loved the real world example with visuals. Also, very good to hear the info on foundations. I’ve had to pay for a foundation repair before and it seemed like a ripoff. $20k to drive two piers to support a chimney? Didn’t even consider getting a structural engineer. Thanks.
Great stuff Tarl, thx. I passed on a $30k+ foundation repair in 2019/20...but I'm in the greater SEA area and pretty sure I'll need helicol piles to shore up the 6" settled foundation on a hill, and to stabiliize for future attic dormer addition STR adu. Havent hired a structural engineer yet, but would love to on BP pro forums to get more tips on local foundation or struc eng contractors to consider, based your exp. Thx!!
Just blows my mind that people will pay more for a 784 ft² house built in 1925 than they will for a 10 yr old 2800 ft² house here where I live. And that little thing looks like it's in a C/D class neighborhood
Very smart keeping it. I did this on my first property and I sold to get out of the monthly payment when I should have rented it out. Granted Covid but still. I should have tried to keep it. I would have doubled my profit easy. Now I'm trying to get back in with what I made and I'm like gaaaah so difficult to find am opportunity to grow that money
This seems like a great deal, but I think you are overstating the cash flow. In addition to management, you should account for vacancy, maintenance, and capex. I realize that maintenance and capex are lower on full rehabs, but they're typically not zero. I think it's a great strategy, and this seems like awesome deal, so why not give them all the details. Even if this were a zero cash flow deal, after those allowances, it would still be a great total return. I'm sure you actually know all this, but I believe oversimplifying deals like this on video can confuse a lot of new investors, so it should be avoided.
Please talk about refinancing with a new tenant in the new renovation. The requirements?????? Before you get the 70% of equity in the new renovated property
Amazing video! Please go into your selection of finishes and appliances! Also Why carpets? You said saving money. But with cleaning and damage? Is that even true? So many questions haha
It's videos like this... where I learn nothing and everything is obvious... lets me know that this is the career for me. Thanks for demolishing my imposters syndrome. 👍👍👍
Bro! No mention of the fix on the crawl space? An otherwise amazing video. Even if there are reasons not to show the fix, what went into fixing that crawl space?
Tarl's editor here. This is a link to a previous video we filmed that goes more in depth about inspecting crawlspaces. It doesn't go into full detail on fixes for the issues (the thought is to work with your contractors to figure that out since no two properties are the same), but the video is more comprehensive than what is shown here. ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-i6djPXPn7Gg.html
This is Tarl. We do supply the refrigerator and W/D for tenants. You may have miss heard what I said. I said for flips we don't always supply the refrigerator and W/D
@biggerpockets @Tarl Thanks for all the info. Tarl, who do you normally go through to do your refinances on your BRRRR projects? Any top lenders you suggest? Big banks/small banks etc?
Did you originally get it under contract at the $95000 price or did you originally offer more to get it under contract and then came back after you got the costs for the foundation and negotiated a better price? Thanks very informational, just went under contract on a flip/brrr but it clearly has some foundation issues any advice is greatly appreciated!
Yes but how long did it take for you to get your refi money You have to rehab and then rent and then wait until the bank will allow you to refi. That’s a long time.
You of course need to finish the rehab and rent it out. That's the point of the BRRRR strategy and only way to increase the value of the property so that you can refi. As far as how long you have to wait, that all depends on you and your financing. Sometimes you only have to wait a day, sometimes 3 months, sometimes 6. All depends on your lender.
To get the cash out that you invested into the deal. All depends on your strategy and financials and purpose for the property. Everyone has different opinions on this. At the end of the day, it's your investment so do what you think is best for you
Good inflation and rising prices with tax write offs make it ideal. Problem with this sort of leveraging is when prices drop. A trendy argument is you keep collecting the rent but not always. In 2009 rents on several units I owned dropped over 30%. Good strategy but with current prices not as safe as it seems.
You're missing that this house has a ton of equity in it after we were done. I have flipped over 600 houses, trust me, I do consider the benefit of flipping vs keeping. There are MANY reasons to keep vs sell, research and learn and grow, you will one day understand....I wish I learned a lot sooner.
Hi when keeping the higher end finishes the same between the flips and the BRRRR, do you do the same for the flooring? How do you decided whether to use LVP or Hardwood? Or do they not change the appraisal value as much?
Hi guys what do you think about buying a mobile home in a park and renting it out yes I'm looking to get into rentals with low money. What are my pros n cons thanks phil
Because we go over so much already. And also, not all lenders require seasoning. Also, rate refi's require zero seasoning. Many many different lenders out there with different requirements these days.
I'm on the fence on selling a rental that was my primary so I can still sell it tax exempt. It's on a 2.25% VA loan. My net cash flow is $2300 for two units on the property. City zoning would allow me to build another unit- even a tiny house. I've done a top to bottom rehab. Bought it for 200k in 2018. It's comping at 800-850k today. Do I sell and build out more STR units on other properties I own, or hold and build out another unit on this property?
@@tarlyarber For this particular property and specific area, yes the 100k in equity can’t be passed up. But in my region, I’d be wasting my time on a $350/month cash flow in which you will never get 100k in equity. Maybe 30-40k. My average cash flow is $540/month per property. I just know what works for me and my area.
@@thewall4669 exactly. If I was in your market, I'd probably be investing the same. Know your market. Good thing there are many markets and it's important to know what a good deal is vs not in that particular market. In Seattle/Tacoma appreciation is very common, cash flow is not.
@@InvestAndGrow2020 so on the BRRRR IM looking at it might be vacant ? I still have to Quify for the loan and the loan on my. current rentals liv in one rent the others
You’re ignoring the equity appreciation and tax writeoffs. You are somewhat right though. I wouldn’t touch this property; I’d rather make a 500K property into a 1M one.
"all that work" is relative based on your business and skill set. I had about 6 hours of my time into this project personally....so yes...$350/m cash flow plus the huge equity and no money into the deal, and adding this into my portfolio...totally worth my time. Learn and Grow, one day I hope your business works for you too.
