The brrrr method

[Outdoorlife2005]

Do any of you use the brrrr method to scale your real estate portfolio?

here in my area I can find houses for $30-50,000 and they need $20-30,000 worth of repairs. ARV is around $90,000-125,000. It all depends on which side of town. There’s currently one real estate investor in town. He’s buying 8-10 houses per year using the brrrrr method. Off market deals. The bankers call him/agents call him before houses are even listed. Last time i talked to him he has over 50 houses here in town. I actually worked for him when I was in high school. Back then he was building apartment complexes. He pretty much told me I’d never break into the real estate market here in my town because he dominates it etc...needless to say soon as I had mentioned I want to get into real estate and would like his advice he closed the door. I’d say he doesn’t want competition lol!

I’ll have to use a hard money lender but I’m leaning towards this method. Of course I won’t stick to just my area. There’s big cities near me I can find deals in.

what experience you guys have with this method? In your opinion What are the pros/cons using this method? What’s the biggest obstacle you face day in and day out using this method?

Do you use direct mail to find your deals or how do you generally find your deals?

 

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[Deleted29658]

brrrrrrr like the money printer???

 

[alexkuzmov]

Do any of you use the brrrr method to scale your real estate portfolio?

here in my area I can find houses for $30-50,000 and they need $20-30,000 worth of repairs. ARV is around $90,000-125,000. It all depends on which side of town. There’s currently one real estate investor in town. He’s buying 8-10 houses per year using the brrrrr method. Off market deals. The bankers call him/agents call him before houses are even listed. Last time i talked to him he has over 50 houses here in town. I actually worked for him when I was in high school. Back then he was building apartment complexes. He pretty much told me I’d never break into the real estate market here in my town because he dominates it etc...needless to say soon as I had mentioned I want to get into real estate and would like his advice he closed the door. I’d say he doesn’t want competition lol!

I’ll have to use a hard money lender but I’m leaning towards this method. Of course I won’t stick to just my area. There’s big cities near me I can find deals in.

what experience you guys have with this method? In your opinion What are the pros/cons using this method? What’s the biggest obstacle you face day in and day out using this method?

Do you use direct mail to find your deals or how do you generally find your deals?

Brrrr method?
What does that mean?

 

[SEBASTlAN]

 

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[BarKogan$]

Do any of you use the brrrr method to scale your real estate portfolio?

here in my area I can find houses for $30-50,000 and they need $20-30,000 worth of repairs. ARV is around $90,000-125,000. It all depends on which side of town. There’s currently one real estate investor in town. He’s buying 8-10 houses per year using the brrrrr method. Off market deals. The bankers call him/agents call him before houses are even listed. Last time i talked to him he has over 50 houses here in town. I actually worked for him when I was in high school. Back then he was building apartment complexes. He pretty much told me I’d never break into the real estate market here in my town because he dominates it etc...needless to say soon as I had mentioned I want to get into real estate and would like his advice he closed the door. I’d say he doesn’t want competition lol!

I’ll have to use a hard money lender but I’m leaning towards this method. Of course I won’t stick to just my area. There’s big cities near me I can find deals in.

what experience you guys have with this method? In your opinion What are the pros/cons using this method? What’s the biggest obstacle you face day in and day out using this method?

Do you use direct mail to find your deals or how do you generally find your deals?

Wait what??
What is BRRRRR

 

[Outdoorlife2005]

Brrrr method?
What does that mean?

Buy, repair, rent, refinance, repeat

buy a house for $40,000. Put $25,000 in it. Arv is $100,000. Cash out refi to get your money back out of the deal and keep repeating the process.
I’m sure there’s many other names for the process

 

[alexkuzmov]

Buy, repair, rent, refinance, repeat

buy a house for $40,000. Put $25,000 in it. Arv is $100,000. Cash out refi to get your money back out of the deal and keep repeating the process.
I’m sure there’s many other names for the process

If you gave me a 1000 guesses, I would have never guessed Buy, repair, rent, refinance, repeat

 

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[alexkuzmov]

P.S. Im trying something similar, this is from earlier this year: RANT - Savour the Pain
Hard to get the cash to buy properties, but once bought its not that hard.
I`m looking for renting though, and selling way down the line when the price is much higher.

 

[Outdoorlife2005]

P.S. Im trying something similar, this is from earlier this year: RANT - Savour the Pain
Hard to get the cash to buy properties, but once bought its not that hard.
I`m looking for renting though, and selling way down the line when the price is much higher.

That’s why I’m wanting to do the method I described. The hard money lenders and eventually private money lenders will get their money back in 5-6 months. Once the property is done, rented, and cash out refinanced the lender gets their money plus interest.

I just know I won’t be able to find any private money lenders until I get branded and show I know what I’m doing and can make things happen. So, me personally I’m stuck using hard money lenders until I’m well branded. Which is okay with me.

 

[Kak]

Before coronavirus I was really looking for some properties that would fit the BRRR model.

I realized that acquisition on terms that fit the model are a pretty tall order, at least in Texas, and that I was passing on many, what could have been, profitable flips.

I decided to just look for flips with great margins and if it HAPPENED to work with BRRR I would just keep the property.

The other thing is, I am ok with leaving some money in the property. Many others are too. The people who aren't are at a severe disadvantage.

With "cancel rent" trending and eviction moratoriums, the landlord thing is going to take a back seat for now to my John Galt portfolio.

 

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[BizyDad]

Man, like you people don't have Google...

brrrr method - Google Search

 

[Outdoorlife2005]

Man, like you people don't have Google...

brrrr method - Google Search

It’s obvious a google search would give results

I made a thread on this forum to get information from people on this forum

thanks though

 

[Outdoorlife2005]

Before coronavirus I was really looking for some properties that would fit the BRRR model.

I realized that acquisition on terms that fit the model are a pretty tall order, at least in Texas, and that I was passing on many, what could have been, profitable flips.

I decided to just look for flips with great margins and if it HAPPENED to work with BRRR I would just keep the property.

The other thing is, I am ok with leaving some money in the property. Many others are too. The people who aren't are at a severe disadvantage.

With "cancel rent" trending and eviction moratoriums, the landlord thing is going to take a back seat for now to my John Galt portfolio.

That’s a great way to look at it!

around here the eviction issues are slowing a lot of investors down. The one in my area hasn’t slowed down. He just bought 3 empty lots and he’s building 3 duplexes. Once those are half way done he’s buying another lot and building a house to sell. He’s going to rent out the duplexes.

 

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[Parks]

It’s obvious a google search would give results

I made a thread on this forum to get information from people on this forum

thanks though

I think he was @'ing the people who were asking what brrrr is. Not you.

I am also suprised that they didn't know what it was though. Biggerpockets is big on this.

Myself I'm nearing finding a property with a FHA loan then I may start going down this path as well just as a addon to my main biz. I don't personally want to put too much time on it yet. A good biz often can print out a monthly/yearly rent in one day!

 

[ljean]

I realized that acquisition on terms that fit the model are a pretty tall order, at least in Texas, and that I was passing on many, what could have been, profitable flips.

This sounds odd, usually flips are way harder to pencil out than BRRRR.

 

[Kak]

This sounds odd, usually flips are way harder to pencil out than BRRRR.

Why? I'm curious on your thought process.

This has been mine:

With BRRRR, the break even point for the cash out refinance is well into the money on a flip... Assuming the appraisal and actual value are very close, and assuming 80% LTV refi... The margins on an immediate return with BRRRR are 20% tighter.

Obviously that is OK... but there is a line where you can make the choice between leaving money in the property or selling the flip and taking profit. One is an eventual winner and one is an immediate winner.

I would leave money in an area I am bullish on, but I would take the profit and walk off if it wasn't something special.

 

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[MTEE1985]

back seat for now to my John Galt portfolio.

Can’t believe that damn therapeutics company stole the ticker...

 

[ljean]

Why? I'm curious on your thought process.

This has been mine:

With BRRRR, the break even point for the cash out refinance is well into the money on a flip... Assuming the appraisal and actual value are very close, and assuming 80% LTV refi... The margins on an immediate return with BRRRR are 20% tighter.

Obviously that is OK... but there is a line where you can make the choice between leaving money in the property or selling the flip and taking profit. One is an eventual winner and one is an immediate winner.

I would leave money in an area I am bullish on, but I would take the profit and walk off if it wasn't something special.

1. You dont have the concessions, sale costs, or commission with BRRR = 8% or so
2. Appraisal can be influenced upward (within reason) to hit the target refi amount; whereas sale price is typically negotiated downward by buyer
3. Level of rehab does not have to be as high with rental vs sale

 

[Kak]

1. You dont have the concessions, sale costs, or commission with BRRR = 8% or so
2. Appraisal can be influenced upward (within reason) to hit the target refi amount; whereas sale price is typically negotiated downward by buyer
3. Level of rehab does not have to be as high with rental vs sale

All very good points and make up for my headwinds. Will consider going forward!

 

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[Deleted29658]

View attachment 35243

This is EXACTLY WHAT I WAS SAYING HAHAHAHA!!!

 

[Alleghenyman]

I want to buy distressed properties and cannot locate a GOOD general contractor. Roofing and siding companies don’t want to do framing, kitchen and bathroom companies are too expensive, GCs want to build pricey custom homes. Where you guys finding them - home advisor/Yelp?

 

[Guest-5ty5s4]

I want to buy distressed properties and cannot locate a GOOD general contractor. Roofing and siding companies don’t want to do framing, kitchen and bathroom companies are too expensive, GCs want to build pricey custom homes. Where you guys finding them - home advisor/Yelp?

I smell fastlane.

If you want it badly enough, maybe you should become the GC and organize all the subcontractors yourself. If you have a knack for this, you can become the GC for the area.

 

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[Alleghenyman]

That’s the plan eventually but I’m not there yet, not ready to quit my slow lane job.

 

[Guest-5ty5s4]

What is a BRRRR method?

scroll up.

 

[rubyarcox]

The main pros, I see it, are that you easily recoup your initial investment. Usually, there are fewer repairs to be done in the first couple of years. Before the Covid pandemic and the war in Ukraine, BRRRR was a very good investment solution. Now the market is too volatile to consider; sometimes, you might lose money, especially if you got the initial investment through a loan because the bank doesn't care how business goes.

 

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