The BRRRR Method for Beginners (FULL BRRRR Deal Walkthrough)

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The BRRRR method can be taught by no one better than David Greene, author of "Buy, Rehab, Rent, Refinance, Repeat", and adorably dubbed “Sir BRRRR” by co-host Rob Abasolo. While David may be a master of BRRRR budgets, schedules, and rehabs, Rob isn’t as familiar with doing full-on buy, rehab, rent, refinance, and repeat rentals. To not only help out Rob but the BiggerPockets audience as a whole, David does a full walkthrough on his latest BRRRR.
This hillside property situated in David’s native San Francisco Bay Area has huge potential to become a cash-flowing, equity-increasing deal. David is turning this large home into multiple smaller units that will rent out to A-class tenants and should net him a six-figure equity boost simply by doing these cash-flow-first renovations.
David walks through exactly how to find BRRRR properties, telltale signs of a good (or bad) BRRRR deal, how to use the BiggerPockets BRRRR calculator, funding options for your BRRRR (from David's broker!), writing up a contractor scope of work (SOW), and how to build cash flow when there isn’t any to be found. You’ll also hear how David had a surprise run-in with the cops when walking this property. Action, excitement, and lots of equity are all coming up in this episode!
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Sign Up for BiggerPockets Pro with Code “REPOD21”:
www.biggerpockets.com/proupgr...
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Grab David’s Book “Buy, Rehab, Rent, Refinance, Repeat”:
store.biggerpockets.com/produ...
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Use the BiggerPockets Calculators on Your Next Deal:
BRRRR Calculator: www.biggerpockets.com/brrrr-c...
Rent Estimator: www.biggerpockets.com/insight...
Rehab Estimator: www.biggerpockets.com/rehab-e...
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Grab J Scott’s “The Book on Estimating Rehab Costs”:
store.biggerpockets.com/produ...
~~~~
Hear Our Interview with David Greene’s Agent Johnny Hoang:
www.biggerpockets.com/blog/re...
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Connect, Learn, and Finance Your Deal with David:
Invest: www.investwithdavidgreene.com/
Learn: davidgreene24.com/
Get a Mortgage: www.the1brokerage.com/
~~~~
Connect with Rob (Roubilt) on RU-vid, Instagram, and Tiktok:
RU-vid: / robuilt
Instagram: / robuilt
TikTok: / robuilto
Twitter: / robuiltchannel
~~~~
Connect with David and Rob on BiggerPockets:
David: www.biggerpockets.com/users/d...
Rob: www.biggerpockets.com/users/r...
~~~~
Follow David on Instagram:
@davidgreene24 or / davidgreene24
Episode 598
Show notes at: www.biggerpockets.com/blog/re...
00:00 Intro
40:13 Financing Your BRRRR Deal
49:50 Commit. Go Pro. Get a Deal
57:01 How Sir BRRRR Funds His Deals

Опубликовано:

17 июл 2024

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Комментарии : 264

@marvelousmistermaple 2 года назад

I’m really interested in this method. I’m 26 and newly married. It’s amazing to see free advice without upselling expensive courses. This was great!

@Emmanuel-lh6tf Год назад

Lol you must have slept the sales pitch around 54min…

@FatBoySlim696 Год назад

They're upselling their website and pro subscription. They also make money from RU-vid views

@AyahuascaDataScientist Год назад

Lol you just wanted to advertise you were young and married. Nothing to gloat about.

@Threethirtytalk Год назад

😊😊😊😊😊😊😊😊😊😊😊😊😊😊❤

@Threethirtytalk Год назад

😊😊

@gabriellemoss6983 Год назад

This video was incredibly helpful. Thank you both for producing quality content!

@serenacheung6077 2 года назад

I love that you provided a practical and detailed walkthrough of an actual deal.

@yeswecanfindaway8913 Год назад

I do like the new format with the nuts and bolts on deals and help guard the pitfalls.

@juan_elbarber Год назад

I haven't finished the video and I already like it, really useful information and well explained thanks

@Digitaltrapping. Год назад

Thank you, are you also familiar with staking?

@LaughtersHouse 2 года назад

About to start the 3rd R on a 4-plex I purchased last year. There's no problem that can't be solved. Key is to buy right.

@jimmypinero Год назад

Awesome awesome stuff. Very informative!

@nigell.8705 2 года назад

Love it. This information is cold. 🥶

@crazyflores 2 года назад

Thank you for this knowledge

@Elsa-qy9hr Год назад

David is such a great communicator 👌

@peekos 2 года назад

Please post more videos about this property. would love to see how it turns out!

@jamesscobba7001 4 месяца назад

Love BP,love David and Rob.

@trashprop Год назад

You FIEND! now the DUCKTAILS theme is STUCK IN MY HEAD. Thank you! :)

@Artbyevelyn 4 месяца назад

Thanks for giving back, in the way of education!!!!

@victormiguelrodriguezc2 2 года назад

Just to add, that you're my Gurus, all your content is very profitable for all of us, thanks Bigger Pockets !

@cremedelaclutchexotics7770 2 года назад

I've probably watched 200 hours or your show in just the last 3 weeks. Amazing stuff. How would you set up the utilities for the ADU if planning to rent out the house as well? Thanks David you're a true genius man.

@freerka 4 месяца назад

Another great video lads. Thank you for laying out the BRRR model. I just wish you would go deeper into the numbers, especially the rehab numbers. When I complete my BRRRs I an very conservative with the rehab numbers, and timeline, as the projects always run late and above the initial estimate. I think David and the crew should also add a carrying cost estimate to the analysis, as there will be extra costs (monthly utility bills, mortgage bills, brokerage advertising fees, ect...) you have to pay while renovating the project. It would be great if they did a deep dive into these extra costs that can come up during the renovation/ stabilization timeline, but overall a great podcast and I am happy I found you guys :)

@ChanceStemMovingMaryland 2 месяца назад

I agree with you! They should definitely add Carrying cost estimates into the Analysis. Alot of our Newer Borrowers don't think about adding that in their when making the Max Allowable Offer. It can offset the numbers, and returns pretty drastically. People also don't factor in atleast a 10% spill over on renovations. Where are you doing your investing at?

@crazyflores 2 года назад

Perfect timing my lil sis just sent me two homes that def need repair👨‍🔧 👩‍🔧 I gotta do something

@dianadean270 Год назад

Hello, thank you all for the great BP videos. I'm wondering does one need to have basically no credit debt in order to get to the refinance step, and have this work as described? ,Or pretty much? ty!

@joshw7582 2 года назад

I wanted to watch the entire podcast on YT but it was on Spotify first. Regardless great podcast

@zigzagluck 2 года назад

How is David turning a SFH into a 4 to 6-unit property? Is he getting the city to change it a multifamily? Most areas only allow up to 2 ADUs (normal and junior).

@geraldbiggs9496 2 года назад

I love the show listen to a lot of episodes maybe you could show us how you find your arv

@bradr3620 2 года назад

Does the calculator assume you are brining the rehab costs in cash, or financing them (i.e. construction loan, HML, etc.)? How do you use the calculator to handle these two different ways to do a rehab?

@christianc7420 Год назад

Skip to 7:00 to start the video

@tracyneighbors7059 Год назад

THANX GUY'S! I'M TRYING TO GET INTO MY GOOD DEBT!

@TylerJohnson-tv1xl 2 года назад

Not finished with the episode yet (41 min mark) but I love the Seven Deadly Sins reference. 😁

@adityadhanawade9560 2 года назад

It was very helpfull

@oteliateate3691 2 года назад

Will you show us the finished renovation pictures? I would love to see them!

@dominiquehill9929 2 года назад

How do you use the BRRRR calculator if you’re using a fixed rate HELOC?

@travisnachman8724 Год назад

It would be nice if you went into a quick breakdown of how you picked the rehab and arv numbers you picked

@frankperez1046 Год назад

The ARV is based on the comparable properties in the area. I would assume the rehab is based on what a contractor or professional estimates but I agree, I would also like to know.

@cullyladino7383 2 года назад

I would love to learn more about the master lease agreement with sublet agreements for each room structure. Great content, thanks for the info!

@HomeSweetHomePropertyLLC Год назад

I would like to know more about that as well. I have a property that it would make sense to lease the rooms out instead of the entire home due to workers coming into the area.

@julieludwig8927 7 месяцев назад

Lease out the rooms yourself so you control rent collection, house rules, etc.

@Eric_In_SF 2 года назад

It’s about time someone finally mentioned that you don’t have to worry about leaving a little money in the deal. I’ve been passing up deals for two years because my numbers always show me leaving a few bucks behind and I thought I thought you had to be able to get all your money out. Everybody’s so busy throwing buzz words around they forget all the details brrrr brrrr brrrr brrrr. Kind of getting tired of hearing that phrase :-) my grandfather did it 50 years ago and just caught a cash out refi.

@HollywoodWestern 2 года назад

Same! Everyone always talks about infinite cash on cash returns. It’s made me pass up on deals too

@paulcarlson298 2 года назад

I'm doing a househack a lot like this in south fort worth. 6/4-7/5+an apartment in detached garage. Won't cut up into multiple unit but will rent room by room

@Jilljungjuk1 2 года назад

What is 6/4-7/5+ ?

@dannysoper1447 2 года назад

Will you guys add a Short Term Rental calculator to the BP pro calculators?

@user27278 2 года назад

ADU; In my area I can buy a 750 sq ft house for 300k+ but I can build it for less than 100k as an ADU. Both would bring in the same rent close to 2k but for the house the payment on a mortgage would take all of my rent money and an ADU would cash flow massively. If an appraiser says it only added 20k in resale value what do I care if I'm making 20k a year in rent??? Besides, building an ADU is actually providing and producing homes as opposed to just removing already built houses from the market to convert them into rentals.

@69mcguire 2 года назад

I listened on Spotify and then watched again on here. The info you guys give is so helpful. I've been able to close on 5 properties so far this year! Thank you for the great information!

@Brainjoy01 2 года назад

thats awesome

@cwr8618 2 года назад

How in the world are you able to do that

@cwr8618 2 года назад

@Justin J I have that in equity. I guess it's all relative to location. No way a newbie is doing something like that in California.

@Mambas_fx 2 года назад

@CWR Hello there

@Mambas_fx 2 года назад

@Starie Blue Hello 👋 Nice connecting with you. I'm sorry if i might appear intrusive. I’m just trying to connect with open minded and ambitious individuals when it comes to finances and creating a second income stream. Do you keep your options open?

@davidstephens9594 Год назад

Thanks you for reminding me that I'm not a failure for leaving some money in my BRRRR's.

@mikeb.4356 2 года назад

One aspect I didn’t hear you talk about, is the extra cost to carry the mortgage while rehabbing the house and have no tenant paying rent during that time.

@zacharymoya5622 2 года назад

Correct me if I’m wrong, but I thought he mentioned that hard money loans will typically be interest only. So maybe during the rehab phase (3-6 months) you’re only payment other than rehab costs will be the interest payments on the amount borrowed, which will vary based on how much you were loaned. Hope this helps?

@stevenmecke257 2 года назад

They talked briefly about it. They mentioned minimizing your holding costs.

@frankperez1046 Год назад

I was wondering the same thing, where do you factor that into your calculations.

@pinkythemaltese Год назад

is there an update video on this brrrr? would really like to see how it turned out

@joseorderas4376 2 года назад

I have two options to find my first property down payment of 80k: cash refi on my current home at 4.2% (current mortgage at 3.6%) I have 350k in equity or get the money from my friend at 4.5% with no closings, inspection etc. needed and secure it on a second mortgage on my home.

@tiaalexander5308 4 месяца назад

Which option did you end up going with?

@TomHallhomebuyingokc 2 года назад

would have been cool if you did a matterport on this for a before and after

@parthkoul9441 2 года назад

Quick question, Can I rehab a studio into a 1bhk and add value? Because, I am Not adding a square footage here. What are the various ways of increasing value of the property?

@freedyorozco8451 2 года назад

My brrrr didn't appraise as much as I wanted any ideas? Bought for $52k renovated for $9k appraised for $80k. Bank for refinance will only give $40k.

@forrestschue937 2 года назад

Just signed up with the code thanks for the discount. How can I receive the BRRRR book??

@BrandenDennill Год назад

does the bigger pockets calculator work for Canadian deal as well?

@jeanettawalstrumtk2412 Год назад

I appreciate your approach to teaching. I've been quite unsure about investing in this current market and at the same time I feel it's the best time to get started on the market, heard some guy speaking of making over $1.3m from a $300k capital since the pandemic and I'm driven to ask what skillet and strategy can generate such profit

@catjav5603 2 года назад

Mind blowing! Ive been a fan early this last yr and We are in our first property finishing on rehab. My question is how long should we wait before we refinance? And how many times can you do a cash out refi in 1 property? Thanks!

@iamstoriespeoplestories5090 Год назад

🎉 thank u

@BeDoHave2012 9 месяцев назад

37:10 - A 100% "cash out refi' is a home run 59:13 - the various roles, and people playing their position for a flip ⭐

@braydenhamilton428 2 года назад

Is there any work that you do yourself? Or is everything done by a contractor?

@joeysaipan Год назад

My dad is a Contractor..They add the Materials of how much is it..then He muply that by four..if the material is $1k labor and materials will be $4k

@Digitaltrapping. Год назад

You’re not earning exponentially then…. Send an emaiI now to…I’ll enlighten you on something.

@Digitaltrapping. Год назад

Biggerpockets002 GmaiI

@Digitaltrapping. Год назад

Look down below

@jacobrubio2593 2 года назад

I wanted to do a cash out refinance on a duplex I purchased in 2019 but just recently found out that the state of Texas doesn’t allow cash out refi on multi family properties. The only solution to this problem is to re plat the property into two.

@paulcarlson298 2 года назад

How so? I know people in DFW who has done cashouts...

@jacobrubio2593 2 года назад

@@paulcarlson298 Fannie Mae and Freddie Mac will not allow a cash-out loan in Texas when an owner occupies one of the units in 2 to 4 unit multi-family property.

@paulcarlson298 2 года назад

Ah, but non qm is allowed. Seems like a weird rule that doesn't make sense

@dotcom2463 4 месяца назад

@@jacobrubio2593but if you don’t live there then you can?

@jeffreid3341 Год назад

Why are the bid line items rounded numbers? I'm a contractor and that rarely happens with my bids. Is this just a mock up or real bid?

@r828realty 2 года назад

What about zoning....knowing you can add rooms etc before buying

@davidhung1016 Год назад

Is the property taxes based on the current price or the price after the renovation.

@lorigribben427 Год назад

I love comment Good bones, great helpful info, thank you friends.😉

@allisonfulton2865 9 месяцев назад

Newbie here trying to understand the process... Why/Do you need to rent first in order to refinance?

@phillipperson3571 2 года назад

What did you need to do to accommodate parking for each of the units? Did sufficient parking already exist?

@alexpader7342 Год назад

The permiting for this deal could have been a whole episode and I'd be very interested in hearing more about it.

@vtambellini Год назад

One question, how much is the original loan for? Does that loan cover the $50k for renovations? Or just for the purchase price? What if you don’t have the cash for 20% down and $50k for renovations? Thanks!

@Subliminal_Chaos Год назад

Then you need to either save up the cash or figure out a way to finance that as well…

@sergeyrudi9836 2 года назад

Hey David, I just purchased my pro membership, how can I get your book:)?

@skysthelimit.podcast 8 месяцев назад

Interesting!

@natusfreedom472 2 года назад

The interest rate hikes , cost analysis? Do a comparison or wait til end of the year

@drexelspivey872 21 день назад

What if you use a heloc to buy a home outright?

@godson30303 2 года назад

As a newbie starting out with a 60k Heloc in Pennsylvania, looking to purchase my first deal and continue to grow I feel I’d need to come out of a brrrr deal a little better then breaking even, so that I can effectively grow? What’s your take on this? What are some ways to grow that I’m maybe not thinking about?

@freedyorozco8451 2 года назад

20% down on Homes costing within 50k to 70k. 15k each home. Mortgage should be around $400. can purchase multiple with $60k

@michaelsherron7815 2 года назад

Are you acquiring and refinancing in your own personal name or via an LLC or similar entity? Thanks.

@kevinp3100 Год назад

Who can you approach to get loans on a rental? Local banks?

@DatsDoodoBaby Год назад

What is the process for switching unit counts and getting it rezoned for more? Best way to estimate costs? My area is very hard to get anything in, but I did see a run down duplex with both units being 2-1 above my city listed at 550k, doing the calculations it wouldn’t generate cash for me, unless I converted it to to 4 1-1 units which seemed possible, but I don’t know how to estimate cost of adding bathrooms and cutting the existing units.

@Digitaltrapping. Год назад

send your questions to my email

@Digitaltrapping. Год назад

Biggerpockets002 GmaiI

@BatistaInvests Год назад

Bro David would look so dope with a Robin Hood Hat on.

@ve5394 2 года назад

Hi I live in Australia, do you have any tools suitable for Australian. Or I can still join your pro and use your services?

@Sebas_-np3lt 2 года назад

What method do you use to pull money out of the property?cash out refinance,heloc, home equity loan?

@freedyorozco8451 2 года назад

Cash out refi

@marylouisone 5 месяцев назад

You too are such goofballs I took a shower while figuring out the odometer and speedometer English twisties lol 😂

@hemantheswargangula9276 9 месяцев назад

How this method is applicable to non- citizen here like on H1B or F1 visa?

@jtjtcook4 2 года назад

I don’t guess I quite understand. When reading about cash out refi’s, I keep seeing that you can take a chunk of the amount of equity you have in the property. How would they take $280K out if the difference between the ARV ($350K) and the amount financed ($176) is only $174K. If he got $280 out, wouldn’t he be left with only $104K after he paid off the original loan?

@hsiang4236 2 года назад

Yes I feel like they didn't explain this part too clearly. Total cash into the home is $99k (44k down payment + 50k repair cost + 5k closing cost) so after they pay off the 176k loan balance with the 280k cash-out, they are left with 104k which is more than the money initially put in

@dbSteelyPhil 2 года назад

How do you get the ARV? I think I missed it and cant find it

@abbyburke8703 2 года назад

What if you are using a hard money loan for the purchase and the rehab of the property? How do you calculate that?

@freedyorozco8451 2 года назад

Calculate what

@Vlad-jw8ck 2 года назад

*it requires money to make money this is the best secret I have ever heard we don't make money we make multiple money*

@tausenti 2 года назад

I dont understand how After Rehab Value was 75k more than the Total Project Cost, how do you calculate that?

@zackandrews2655 Год назад

Is it 80% of 350 minus what's owed on the property you get the home equity loan of 280 . Or 80% of 350 minus what you owe on the loan is what they give you a home equity loan for ?

@basilzervis4632 2 года назад

This was user helpful! I am trying to save money for a down payment for a FHA loan so I can purchase a triplex or something of that sort for house hacking. I want to use this as my entry into real estate. Is there an episode y’all should e done that goes in depth (like this episode) on how to house hack/rent?

@millionairemelly4164 2 года назад

Yes they have plenty of episodes on house hacking. And FHA Loans

@freedyorozco8451 2 года назад

3% down FHA loan Airbnb

@ceejeidelapaz8390 2 года назад

Does the calculator work outside US?

@DavidHeyburn Год назад

Is the analysis of the deal and showing where the difference ARV and the "money into the deal" the 20% delta that would otherwise be a down payment, assuming that 80% loan is coming from a private or hard money lender ? Or do you have to actually fund a down payment from other funds?

@Digitaltrapping. Год назад

Refer your questions to my email

@Digitaltrapping. Год назад

Biggerpockets001 GmaiI

@sararyan6636 11 месяцев назад

But how do you make it a duplex if it’s a SFR? Don’t you have a problem with that and city?

@kunlesoniregun2094 10 месяцев назад

Am I misunderstanding? or at 58:31 did he mean **20% of the purchase price lined up perfectly with 10% of the appraised value? If that is not what he meant then I don’t understand how a bigger percentage of a bigger number can line up with a smaller percentage of a smaller number

@ShadesofTexasLLC Год назад

So, if we add up all the expenses, i.e purchase price, closing costs and rehab costs, and even the closing costs on the refinanced ARV, we get 280k, but what I'm not seeing is a down payment. Is that because this approach assumed a hard money load with zero down? And if we are early in our investing and using a conventional loan, requiring we are putting 20% down or 44k, would this deal no longer make sense? How should I look at the amount I have in the deal with a conventional loan approach and compare to 80% of the ARV? Would love some feedback on assumptions here!

@ShadesofTexasLLC Год назад

I also don't hear anyone talking about what to do if you got a 4% loan on an BRRRR in December 2021 and rates were 6% six months later when you expected to refinance. Obviously changes the new loan substantially and drives up the costs of your BRRRR deal in exchange for your refi out and repeat. I plan to just hold of course, but I'm not feeling like it's wise to take out the equity at a higher interest rate. Is that short sighted?

@wanderawaywithsirikay3522 2 года назад

hey how about a Seeing Green playlist?

@BrisSuave 10 месяцев назад

“A master lease” and have each unit subleased. How can I find more information about this?

@hayleynicole4107 Год назад

Why would you refinance before adding in the units??

@user-sj7uj1lk7e Год назад

This website can only be used in the US?

@OptimisedTutorials 2 года назад

I’m looking to complete my deal. I’m struggling with capital. I’ve been toying with the idea of refinancing without having the rental contracts/property entirely complete. Would this throw things off? Or would it just be a minor speed bump? I know the deal is the big part but I really want to make sure my ‘out’ is as profitable/capital forward as possible.

@freedyorozco8451 2 года назад

Won't be able to

@peekos Год назад

Did he ever post updates on this house?

@mcktsh4245 Год назад

So basically, you refinance, pull out your money and use that money to do it again, right? New at this so please be patient with me. So the whole concept would be to keep all the houses as rentals? Or can we flip it?

@Digitaltrapping. Год назад

Just refer your questions to my email. I’ll enlighten you on a easier level especially on soemthing.

@Digitaltrapping. Год назад

Biggerpockets002 GmaiI

@georgefreeman6957 Год назад

how long does it take to refi ? 1 year?

@CreditSolutionist 2 года назад

This stuff absolutely akes my head spin lol

@kylekotecha153 2 года назад

Have you read the book? It helped me grasp everything.

@reggaepaul 2 года назад

Brrrrrrrrrrrr

@Onepointmessage Год назад

Getting closer to that milly!

@helenlam9195 Год назад

I signed up for pro with REPOD21 after listening to this podcast. How can I receive David's BRRRR book? Thanks!

@mrmemo27 2 года назад

can you guys make an episode that covers ADUs?

@IllinoisREI23 2 года назад

There was an EP about ADUs a month or two ago.

@biggerpockets 2 года назад

We did! ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-Q5hhTxlWJ8g.html

@shaneamcnally Год назад

David. Where do you roll Jiu jitsu?

@teleiagunby1155 Год назад

Love your show! Could you also use the equity in your primary mortgage to purchase an investment property by getting a Home Equity Loan vs a HELOC especially if it’s a fixed rate as well? We have a ton of equity and at first we we’re going to do some renovations on our home however we would really like to get into short term rentals and investment properties etc.

@Digitaltrapping. Год назад

Send a message to my email alright?

@Digitaltrapping. Год назад

Biggerpockets001 GmaiI

@burnercomented 2 года назад

Hey it would be cool if a "master class" would explain acronyms...What is a ADU...and know I'm not going to google during "class"

@dncprops427 11 месяцев назад

Why is there never much discussion about dealing with zoning on these shows? Here we have a property being turned into multiple units and nothing is said about how the property or area is zoned?