This is where multifamily can have a distinct advantage - rent bumps have a direct impact on pricing where they might not with single families. You have a lot more control over what the ARV will be in many cases because of that.
Want to know what makes the BRRRR even better? Doing it to multifamily. I buy off market properties and get them below market value. I purchase with a loan, raise rents, refinance a year or two later. I have several small apartment complexes with heavy cash flow and none of my own money tied up in the property. 😀
I have a question when starting with no amount of money or at least 1k can i do the brrr method? He only said Buy not get a loan from the plan to buy a house then rehab then rent
@@adiosmiamigo try calling real estate companies in your area and ask for the contact info of agents that deal with multifamily and apartment units. Technically they all can but some people are better at it than others, you want those people. Give them the parameters of what you can purchase. Now back to your parameters just be straight up and tell them I can afford a purchase price of up to $500,000 and I need to have at least 10% equity coming in the deal so I need something that needs a little bit of TLC. That's the short end of the stick or look in public records, cold call/send a letter to the owners and or management company and tell them your interested in their property
yes!!! You MUST know your numbers so that you don't get burned. The hardest part of BRRRR for me is finding the property to buy. i talk about it a bit on my channel - but this is certainly the biggest challenge in BRRRR for me.
Great video as always! I would love to see a video series where you go more in depth on each steps of the BRRRR method. This video was super informative but I would love to learn about the small little details that go into each step.
Chandler, this is probably the best overall review of the pros/cons of the BRRRR strategy I've come across. I'm looking at working the BRRRR strategy soon and this overview gives me some great pointers I need to do before starting the process. Thanks for the insight and I'm moving on to your "Run the Numbers" video next. Have a good one and thanks again!
We ran into this with our lender where we ended up leaving our money into the house. We didn’t understand their percentage schedule well enough when we bought the property. Make sure you’re aware before you buy.
This is EXACTLY to the numbers what I am in the process of right now! Just bought a duplex for $55,000 in cash, and am starting the renovations soon. After 6 months, based on comps, it will be worth $110,000-$120,000. Thank you Chandler for providing the perfect example!
Chandler great content and love your videos! I would love to see a video where you explain how you procure a property once you find one, run the numbers, and want to proceed. Specifically how to lock up a property while you do your due diligence and when do you negotiate price. Thank you. -Chris Cowell Okc, Ok
I know of a property that I've been eyeing for months and it does need work i went inside when the owners showed me i had no idea what i was looking at. I think brrrr would be good for it but also wholesaling it wouldn't be a bad idea either
This sounds like a great idea. I plan to start investing in a few years. But I’m super nervous about having that many mortgages on a rental. How many BRRR’s is to many at one time?
Can you elaborate on why using your own money is a terrible return? If you front the money, then refi and walk away with 20k extra that’s nice. But if I use other people’s money, and get that same 20k, it’s a much better return since I didn’t front anything. Is that what you mean?
What procedures do you recommend if your renters don't pay you and/or vacate a property? What's the average length of time they have to vacate once all the legal notices were processed to vacate?
Chandler, you mentioned that you have to have good credit to be able to refinance. How does that work when you have an LLC?. I know that you don’t need an LLC for the hard money loan, but what if I want to refinance with it?
Possibly try building business credit so you can use the ein under your llc instead of your person credit . Get an ein for your llc , duns number and start building biz credit ! You can build it in 60 days if you’re dedicated
Hey Chandler, how would you suggest people avoid having a hard money lender or private lender steal their prospective property? They find out about this great deal and buy it themselves instead of lend you the money for it.
This is my first time really looking into this and I'm intrigued but I have so many questions my one question is can you get financed to buy the property and still use this method
Maybe I'm missing something here.. I am sure that you said but it cash then rehab.. so why would one have to wait to refinance if you didn't finance it to begin with.. I'm confused or is it an oversight... BrrRr... Well if I had enough cash to but it this method isn't entirely correct.. buy rehab rent finance repeat..
When quit-claiming the property over to an LLC, do you obtain permission from the lender? Is their written consent sufficient to nullify the possibility of them accelerating repayment anyway? Have been wondering about the best way to do this.
How long would you have to wait to accumulate enough rent to show your bank that the first home is indeed a cashflowing rental property ..in order to qualify for the next mortgage
Couldn’t you just do a 30 year conventional loan for the initial purchase, do your improvements, rent and then do a cash out refi? Why do hard money loan I you don’t have to? Am I missing something?
What I want to know is how all these brrrr guys are getting these low renovation costs? $15k to renovate an entire property? Assuming you’re not doing it all yourself, how do you find these inexpensive contractors?
BRRRR assumes that the rent income continues without interruption, right guys? If I have 5 properties on mortgages of 100k USD each (and 100k USD cash in hand from the 5th property mortgage), it means if the rent stops, I am liable to cover monthly mortgage of all 5 properties. Right?
So my scenario is I already own my primary home, well I have a mortgage on it. Time plus my renovations has given me about $45000 increase in value from purchase price. My total equity would be roughly $100k. Since I provided the down payment for a conventional loan, how can I use this strategy to work in purchasing or at the very least providing a downpayment for my next property. I guess how you explained it is that you are either using hard money to pay cash or your own money to pay cash, personally I would rather use my own money. Are there instances where you are just ponying up enough for the downpayment, then rehabbing, then refinancing and using that money for the next place? (As long as you are still cash flowing of course). I understand what I am describing isn't as clean as what you spoke on but maybe you could provide a bit of clarity on my specific example. Thank you!
I'd be interested in knowing of you've made a video in the past that walked through a property you personally used this strategy with which showed real #'s for that deal. Please let me know
Been trying to buy good deal under value narket with 20% down but never take my offers So i guess i will have to barrow money to make cash offer refi just to get the investment out and pay out money barrow
So in the top right of RU-vid you can click the quality you watch the videos in. Were you playing it in 1080 P? I spent a lot of money on this camera so I get very disappointed when I hear this ha ha I would love your feedback
@@ChandlerDavidSmith I am not saying it's awful, but when compared to Graham's or Kevin's videos, your videos look less sharp. I am not an expert in cameras or lenses, but usually, that is what makes the difference between $150 lens and $5000 lens. Also, it could be that your face is not in focus.
Can anyone please help with the course. I have never been able to actually view the course. Has anyone had this issue. Does anyone have a contact email for Chandler please.
I’m so sorry you’re having issues! What you can try is going to the login screen for the course, plugging in your email and pushing “forgot password” and go through it again. If that doesn’t work, please email me at chandlerdavidsmithbusiness@gmail.com and I can help you get it figured out 👍
What no one mentions about the brrrr method is that once you refinance, your mortgage on that property will increase 100 dollars for every 10k you cash out refinance. Simply put, if you refinance and pull 80k out, your mortgage in that property will roughly go up 800 dollars rendering your profit on that property non existent, actually putting you in negative rental income per month.
Not sure where you are getting your numbers. That math wouldn’t even work at a 10% interest-rate. With current interest-rate if you pull out 80 K it would be between $300 and $400 extra a month. If you’ve purchased your property correctly you should still be cash flow positive in a big way.
@@ChandlerDavidSmith can you provide a breakdown cost for your profit on renting the property at your 1% rule. What is your average monthly take home/profit on a single property where youre renting and implementing the brrrr method. Another thing to help me understand.. You're essentially borrowing money from equity to cash flow over to a new property while increasing the loan value but renting so tenants pay the mortgage, so that you can aguire more property /assets and repeat the process. Sorry that's a lot but just like to be clear.
I want to say, I buy a $100k house with a morgage, I pay down 20%, what is $20k and then I will rehab the property and increase its value, I go to the bank and refinance the loan, I recovered my money. Obviously it is a very simple example
