BRRR Strategy Explained

[@billyt9921]

Finding houses to 'do up' is gettin harder and harder.

[@XCALIBURSHOES]

The issue is that you're exposed to falling home prices. If prices fall your equity is whipped out in the short term. This strategy only works if you can refi for a 15 year mortgage and hold until the mortgage is paid off. Then after 15 years you'll own all properties outright at 100% equity. Its a long-term strategy that ties up your capital ($75k in this example) for 15+ years. Overall, its a solid model if you don't need the liquidity.

[@odycmboden3580]

you aren't selling the house. you're renting it. so it doesn't matter if house prices fall. youre still getting the passive income from the cashflow of the monthly rent.

[@XCALIBURSHOES]

@@odycmboden3580 exactly. It's a longer-term investment strategy with little or no liquidity. Good deal if you want to tie money up for 15+ years.

[@splashbros4651]

How is it an issue repairing a damaged house, which then immediately increases the value?

[@dabznslugg9492]

If the tenant don't pay or can't rent it all fall like domino

[@ladyn5273]

Best to rent it to a Local authority or the home office.

[@Darkman155]

If the boiler breaks down that's few months rent gone

[@ladyn5273]

@@Darkman155 you’ve never heard of boiler insurance??

[@dabznslugg9492]

@kurtsmccallie7593 they got squatter rights n can't evict them until the court orders

[@Leethetypeofbloke]

@@dabznslugg9492 yeah my mistake, you can only kick out short stay tenants using your serviced accommodation. It’s more complicated with regular buy to let tenants.

[@kennymeighan9953]

Keep it coming 🤙😎

[@MrFizzyhouse]

The bank still owns the house you never own any of the houses until the mortgage is payed off.

[@smartnothard2400]

In one word? Sad. On the flip side, it’s not to late for you. Wake up! Positive dept is tax free. And it is 100% yours regardless of if the bank has financed it. Don’t be negative.

[@Pugz_punny]

And the mortgage will eventually be paid

[@deanroy7936]

@@smartnothard2400 How many homes do you own?

[@kevindonnelly3399]

It's all about making passive income you fool

[@riboid]

U can use the rent to make.10% over payments per year and clear it that way.

[@renegade2853]

What about when the WEF change the landscape - “You’ll own nothing and be happy”. This method used to work a charm but seems the powers that be are making it less feasible.

[@AGproductions87]

Best method

[@Kilex6522]

You can use bridging for refurb, saving you the £20k.

[@FontaineBrothers]

Yeh nice and can also buy with mort

[@smartnothard2400]

10 months later….. 1-3% apr has become 5-10%. Grrrrrrrr. But still doable. Ideally only use bridge short term as it’s considerably more costly than refinancing.

[@er.harshagrawal3290]

What about the monthly EMI ? The emi of debt on 75k will be more than your rental income? Unless you have a rental yield of 14 or more this method won’t work. Kindly Correct me if wrong

[@benbrewer6105]

Do you have a mortgage broker that you would recommend?

[@Taporeee]

CGT bill how much?

[@Zoubirking-1970]

Genius

[@quincygay3861]

How much cash flow on the first house

[@kevinboyle8855]

So what happens when the tenant stops paying rent for months on end, after the section 8 you have to go to court for possession order then for a warrant of possession, then get the bailiffs, then get your property back which is trashed, and the tenant has no money, so no point going to the courts on that, so you have to cover the cost of the repairs, plus the lost rental which was covering your mortgage which your paying? I know not all tenants are like this, but if it happens when you do this, you are going to need another source to cover the costs, so....

[@ronburgundy1033]

This business isn’t for you mate move on to something else

[@martynshaw2551]

U pay a good letting agent 4% extra and after 2 months they pay the rent if the tennant doesn’t! Bit of extra insurance that’s all

[@kevinboyle8855]

@@ronburgundy1033 Yes, thanks for the advice, I luckily have another business already providing a good income. My comment was in relation to the system explained, and the consequence of such an event. You didn't explain why this is not for me, or how you manage such a situation. That would help more.

[@kevinboyle8855]

@@martynshaw2551 Thanks. So do letting agents provide an insurance or guarantee to cover this eventually, not just managing the process, but actually for lost rental income, like a good landlord insurance might? And the damage, is that covered under insurance as well?

[@ronburgundy1033]

@@kevinboyle8855 what is your other business

[@ORIGINAL786dodi]

It’s not as easy as it sounds, although it’s very possible but without the correct know how, education & knowledge it’s just a dream for many.

[@karimsalame6410]

Can you refinance if you started with your own money? I thought that for refinancing you needed a mortgage in the first place..can you confirm?

[@rpk-yk5gv]

Nah you can, that's what a lot of 60 year olds do with their home so they can invest the money in other properties

[@markc3258]

This is exactly the nonsense that lead to the 2008 crash .. House prices fall Tenants don’t pay rent Your in trouble .

[@Benst2178]

No it’s not what lead to it.

[@Benst2178]

Obviously you’ve never heard of Blackrock and what it’s founder has been upto over the years

[@asmith5149]

@@Benst2178 actually it is. An over inflated property market in 2006 / 2007 fuelled by the everyone's a property developer mentality led to a crash, which sparked a liquidity crisis in the banking system leading to a credit crunch and a collapse of the whole deck of cards. I seen it first hand.

[@Benst2178]

@@asmith5149 It was high risk mortgages as a whole that was a major contributor to the crash, not a particular subset of borrowers.

[@swirledworld340]

Banks caused it... if you don't over leverage by taking a lesson from 2008 you could due it... don't be Icarus.

[@palakondarayuduuppu6420]

So if tenant skips for 3 months, ur house is up for auction that too with 50% discount.

[@ZenityStudios]

But after refinance you have a mortgage which is debt, which is factored into your ability to get next loan for new house. after a couple you will have too much debt to be approved for a loan. too high debt to income ratio or no?

[@c.hustle7790]

You can take out a second charge mortgage which is a second mortgage completely separate from your existing mortgage. The bank will allow this because like your existing mortgage you’re using the property you have as security to take out the second mortgage for another property.

[@benlackenby1435]

20k refurb and instantly 50k more value doesn’t sound right

[@FontaineBrothers]

It’s an example

[@benlackenby1435]

@@FontaineBrothers didn’t know youse replied ow lads

[@benlackenby1435]

@@FontaineBrothers isn’t there a law that you can’t refinance until three years in to owning the house

[@FontaineBrothers]

If you buy with a 2 year fixed mortgage then you can’t refinance until that point. Most people buy cash to avoid this. We bought one cash for 60k and spend 30k on it and it got revalued at 130k. So that’s a 30k refurb and 70k uplift in value.

[@bigjak7358]

Youll never find a house up the street for half the price what needs doing up. Back in 2002 you could.

[@Abf_-oq8ps]

You’ll only get it back if it’s your own money. You can do this with OPM and essentially not use any of your own if structured correctly.

[@asmith5149]

Lol. Assuming of course u can get a 100k valued house for 50k, not likely and even less chance of doing it more than once.

[@FontaineBrothers]

Just done a 60k house spent 30k on it. All in with fees 93k. Now valued at 150k. That’s in aberfan South Wales

[@andypreece1754]

​@@FontaineBrothershaha no u haven't

[@smithbrownjones]

The math works on the premise of buying at, typically, 20-30% below market value in the first place.

[@AlexSavage]

Outdated information, it use to be like that, not anymore..

[@howard5854]

How comes ?

[@AlexSavage]

@@howard5854 the math is not the same, market conditions have changed

[@longbowman7462]

Nice vids bros! How do I get 75k in the first place tho?

[@boomerang4918]

Grind.

[@george-us-them]

Buy a crypto coin called Hathor $HTR - and no I’m not a bot

[@edwinhunnet2666]

When you refinance the interest rates are higher.

[@KILLMALAKI]

How do I go about getting 75k i earn £10 per hour so should I just keep saving or is there a smaller investment I can make to flip my money?

[@FontaineBrothers]

We started with rent to rent

[@KILLMALAKI]

@@FontaineBrothers ok ill do some research and get into that

[@user-jx2vt4ho6p]

Give me the address of that bank who gives 100 number of loans for 1k rent😂😂😂😂

[@GustavoRodrigues-je2ci]

They won't give you 75% of the new value but yes 75% of the difference of the values

[@lucasmoreno5330]

buying is very different than owning.

[@sahab999]

Once the project is done, do you use the 25% equity in the refinance as a deposit for another property or some portion of the released 75% to repeat the process again for buying another property?

[@salsabila786]

You do it all cash. Started with 75k, now that you've uplifted the value of the house to 100k, when you take out 75k (75%), you have 25% equity in the house as well as 75k cash, which you can repeat the process

[@sahab999]

@@salsabila786 yes but then where do you get the cash to uplift the next one?

[@sahab999]

@@salsabila786 as in building costs, where do you get it from in the next project

[@salsabila786]

@sahab999 did you not watch the video? He bought a house in need of renovation for 50k, refurb (as in building work) cost 20k and 5k legal and fees. It's all included in the 75k, it's not easy to find such deals but they are there

[@sahab999]

@@salsabila786 I’ve watched the video, but I’m talking about worst case scenario. What if you don’t get enough from your refinance to then have enough funds for the building cost on the next project? Can you not borrow at 100% bridging loan instead

[@barrybruton4577]

All the rent should go on buying your first house outright then do it with your other houses rent If not u will lose your shirt

[@MasonSlots]

There’s one near me for 50k, the bank said I can have mortgage for 50k but I don’t have any of my own money really at the moment but I understand it and need to do this at some point

[@imdoc7872]

Why would you refinance a property that you paid for in cash, fixed, and now have a tenant in giving you steady cash flow? Why go into debt?

[@viasenzafine]

He explains it in the video, you can use the money to repeat the process

[@oldershikari828]

Two words. Negative equity.

[@lcameron2480]

Where you buying houses the 1970s?

[@FontaineBrothers]

South Wales

[@lcameron2480]

Good luck renting it out

[@Uno-1968]

Good luck with that one 😅

[@jaymarshall2073]

Forgetting one point, you pay tax on the profit so you aren't left with 75k.

[@lifeofadividendinvestor1206]

That only happens if you sell which he doesnt. if you tap equity on a refinance its not a taxable event

[@mididoctors]

Repeat the process till your running around collecting a growing proportion of everyone's wage packet in rent for the bank's who get the house if it fucks up ...in the meantime everyone gets poorer and disposal income flows into the economy dry up.

[@FontaineBrothers]

Tesco sell water and food. Go protest about them evil scammers for making money.

[@TheRayRayVideos]

You would be better off leveraging your money on property developers/reits on a spread betting account

[@tonys8448]

Spread betting 🤣

[@almilhouse9059]

What happens when they stop paying rent

[@MaximilianvonPinneberg]

Or rates go up and new landlord legislation comes in or changes to taxes on landlord income or property development.

[@ChrisDodges123]

Get a new tenant

[@TheRyan909]

I’m no rocket surgeon… but I would imagine you would evict them probably?

[@jameswilliams7026]

KZbinr Mouthbreather: HeY DiD YoU KnOw YoU CaN GeT iNtO MoUntAIns of DeBt !?

[@benwilkinson5457]

Great until intrest rates go up. Just like they have. Buy to let is dead

[@paulkirton8945]

A 20k refurb? That's the lawn trimmed.

[@davebrown9707]

Just wish I had 75 k lol

[@FontaineBrothers]

Just keep stacking by any means

[@m0Rzx]

Can get a new way of gnashers an all kid

[@rob.1]

If only you had 75k chief. How's the modeling business coning on? Fill in the paperwork before you're struck off. Again.

[@Mainboy1]

Haha.

[@Mainboy1]

Hahaha.

[@sowman69]

Did you know you can buy an unlimited amount of houses for the price of 1 house?? = buys 1 house 🤦‍♂️

[@pocketman5510]

How do you find the run down house

[@FontaineBrothers]

Gave me an idea for a video haha lots of ways

[@pocketman5510]

@@FontaineBrothers let's see that video 👍

[@stephen_combs]

Yeah so basically you have to have 75k to start with and find a rundown house that's lost half the values so when you throw money it in its worth 100k. So how many ppl ya know that how's 75 k saved up that's needs financial advice lol.

[@jordanlennon9478]

Don’t you need 100k seeing as your going to need 25k towards the mortgage

[@Abf_-oq8ps]

Not with this method. Not a traditional residential loan. Banks here only care about the rent more than covering the debt. Basically there’s no need for the DP with debt service coverage and equity you’ve created from rehab.

[@x12flare73]

You forgot the part of obtaining 75k in the first place 😂

[@george9089]

Thats your problem. There's so many ways. Use your brain

[@FontaineBrothers]

Guess I have to spoon feed. Ok what you do is earn money, save money, create a buisness, go to a sales job, sell the shit you don’t need. Lol and then keep doing that

[@xxnickthegreekxx]

This is 75% cap 🧢

[@mr.random8447]

Who has $75k in savings

[@normanrennie1878]

Aint worth doing now doe

[@FontaineBrothers]

Yeh it is

[@martynshaw2551]

Always worth doing, people told me not to move when brexit was announced, we’ve had covid, internet rate rises, Ukraine Russo war and my value has gone up 45%! There’s never a bad time, on average over the last 4 years, property has gone up 25.7%!

[@martynshaw2551]

Interest lol

[@riboid]

I have maybe £400k in positive equity in my houses and want to do this but can never find the right house with at least 20% below market value.

[@FontaineBrothers]

There are deals out there 👊 keep going

[@leeclayton3319]

And I bet you have a total of 0 houses

[@FontaineBrothers]

How much u wanna bet

[@Yesterday23071]

Yes how much you wanna bet ? S-o much fuc… hate ! This made my day .❤

[@closetmonster4471]

Yes you get a tenant and the fuck chooses not to pay the rent then you got a 4 to 6 months battle to get them out at which point you have to cover the rent and legal fees to get him gone so if this is your first time trying this you will lose everything because you can't cover the rent

[@FontaineBrothers]

Rent insurance covers all of that

[@knowles2211]

🤣🤣🤣🤣🤣🤣 That's definitely some logic

[@sebastiantootill8403]

I get the meaning but your statement of unlimited houses is so false Jesus 🤣

[@FontaineBrothers]

You can keep repeating

[@artemis9306]

Such a show off lol