Build your next investment property for free using THIS strategy

[@AaronHope_Sow]

All I can say is wow. I was already sold on new construction for an investment strategy, but the breakdown of using comps to gauge your build size really helped this make sense for me!

[@customhomebuilder]

Hmmm....I'm a builder and I would ask to see the financials for sure. When you're putting your land as equity, my experience has been that the lender looks at what you paid vs what's it 'worth' . A lot has to go right for this model to work.

[@Lavonwoods]

I’m a licensed lender, typically after 12 months of ownership we can use the current market value otherwise we do use the actual cost of the land to give you credit

[@jackies35]

@@Lavonwoods Thank you for this!

[@TheBrokerLife]

What this man is doing is what I LOVE to see. He knows how to play the game like a champion. I have done this one time in Las Vegas with a large home and just submitted my short term rental application with the county today. I am subdividing my land as we speak to do a second STR!

[@patrickbellefleur5508]

Just closed on a lot in GA. Working on long term rental.

[@kr1sant]

This is cool. I’m in Dallas. I purchased some lots here in 2018. I purchased an acre that was 28k. I am going through the process of subdividing it right now. The land is worth about 200k 5 years later. I am trying to build 2 houses right now.

[@bikenraider99]

Very cool to see. I ride by these properties. It's good to see the new construction in the old neighborhood

[@jrauck]

As building a custom home myself, it's NOT just 20% down typically. You need the following in cash: 20% down - just to get the loan from the bank $6-12k for closing cost with the bank (sometimes can be rolled into the loan, but not majority of the time) $3k-40k for architect drawings (sometimes can get this rolled into loan, or your builder may have in house design) $2k-10k for engineering (not all cities, but most large cities require stamped (by PE) engineered drawings - includes framing, foundation, and wind bracing plan) $10-25k + 10-25% for builder (first initial fee just for a builder to talk to you cost 10-25k (typically includes designing/going over plans, may not need architect after this), then 10-25% of house cost for them to "build" your house) Not as simple as just saying 20%... as he off handedly mentioned, they pay plan runners for permits, architects, etc. Sometimes you can add these cost into the loan, but many banks only allow certain items to be added to loan. Don't just assume it's 20% down.

[@joelwillis2043]

The dude is just a fake guru.

[@taylorsessions4143]

I wanted to get my hopes up!

[@jackies35]

I hear you... See, it's called (BRRRRJ) - build the relationship, research, read, repeat, and Jesus. Build the relationship first. Assume 20% down and work the numbers: Banks have a lot of money; if the deal is excellent, they will trust you and take ownership. It's your loss, not theirs (bank). He could go to private lending, but he decided to use the same bank (relationship). Location, location, and location (research) all banks, towns, and run the comps. Last but not least, favor (in Jesus)! Read and learn the BRRRR method asap! There are millions of young adults doing this right now. They struggled during and after college. They are home-hacking as we speak to make ends meet. I heard the young man in the video say collateral several times, and no need for a downpayment. ONCE he said that I knew he was not playing. I purchased land and went to my bank to see if I could get a construction loan. Do you know what they said to me first? 'It would be best if you had a 20% downpayment'. Once I said I owned the land, I walked out with a construction loan of $238,000. Blueprints, comps, docs, and my CPA were there (yes, no downpayment). So you can have more than a 20% downpayment if you want, but you don't need it.

[@jackies35]

@@joelwillis2043 But you are hear learning everything! LOL!!!

[@jackies35]

@@taylorsessions4143 You can! Just believe and keep doing your research. I didn't think it was true five years ago. After COVID, everyone needs a way to survive and thrive. House hacking is happening all over the world and in NYC. Everyone is getting into real estate to learn more and earn more.

[@alvinsingh9750]

I'm happy for this brother using his head and brain making money. Good for him. I need more brothers doing what he doing. Make that money.

[@davidr5360]

The gigabrain move for using the CC points is to have the Amex Platinum - Charles Schwab edition to cash those points out into a Roth IRA without triggering the normal $6500 contribution limit. Kind of a crazy loophole, but def one to take advantage of.

[@jeremyg469]

This is sick. I gotta look into it

[@ScottStephenSmith]

What on earth did I just learn. Googling.

[@cnauyodearhsti]

The 6500 is an IRS limit and if you're audited this will cause you a huge issue

[@mylifeintexas]

So essentially, you need enough money to flat out buy land, design a house, build a house. Then go to bank to get your money back and rent it so someone else is paying that loan. Hmm sounds easy enough. Only problem with this is that you need the money upfront first before you do anything. For probably about 90% of everyone in America, that’s the biggest barrier we face. 😢

[@christobar]

Exactly, you need money to do this. Once you get the train rolling then it'll be really lucrative. Also this depends on your locality. There's nowhere in WI (for example) where you can build a house of that size for 200k, nor could you have lots that small in that orientation. Houston is known for it's lack of building codes and zoning which probably helps this work out for him.

[@patrickbellefleur5508]

@@christobar In GA you can, and another big factor are the trades/pricing and small arch details. Placing interior or exterior trim around the window, the amount of windows or door, type of material, etc, etc. can influence your pricing. Also, subs that only do new construction vs the ones that do stuff for homeowners have different pricing. Subs usually give significantly better pricing to builders vs one time customers/homeowners due to the potential of future consistent work.

[@MohammadMoghimi]

This is so legit and humble at the same time!

[@nik5083]

Be VERY careful on using CC to purchase materials and then have the loan pay off the CC debt. A LOT of businesses will charge you a fee to pay with the CC. Just that CC fee alone can add thousands of dollars in costs to the project, which completely negate to mile you built up on the CC. Not all store do that but a lot do. So just be mindful of where you do this.

[@Robuilt]

This is a fair comment. However, it’s usually pretty clear when the store will charge you 3% to use a credit card. In those instances, I don’t use my credit card.

[@nik5083]

@@Robuilt absolutely. and its always good to just ask. When it does work....man you can rack up points quick. Got my family of 4 free tickets from coast-to-coast using this method on my last new build.

[@martin_wood]

Lots of perks with the platinum that make that cost go away if you use it. Free global entry, $15 a month free Uber credits, Marriott upgrades, Amex travel lounges.

[@anomadlife7397]

Opportunity zone sounds like another way of saying "the hood". Sure I would love to rent an airbnb there for my next vacation. 😂

[@justcallmebon2684]

Hey. It’s renting

[@ddfelder2]

Not all opportunity zones are in “the hood” Smh plus you sound ignorant as hell… please don’t get into the real estate space with that stupidity

[@renoallstate4573]

Funny you say that! I rented a vrbo on the outskirts of the hood in Nashville and it was all good other than the car that was shooting at another car middle of the day! lol I wasn't sure I heard what I did till I went outside and picked up a few bullet shells. But hey, it rents because people from out of town don't know...

[@Miami305Nights]

Opportunity zone means your there before the rest of the "white picket fence" buyers which means MAD PROFITS and tax deductions..FYI My Duplex and triplex in MIAMI FL. (Opportunity Zone) makes between 14k to 17k a month hope this helps 🙏

[@marcj3757]

@@Miami305Nights Ahh! That's how you stacked up the 1.2 mill for Tn .. do you invest any other ways in realestate?

[@shaunshutes7442]

I used to watch you with less than 50k subscribers. You've grown a lot as a video content creator. Great grind. Reminds me of strategies Mr.Beast talks about.

[@Redac2608]

I have land in an opportunity zone and I would love to hear more about it.

[@smrteng]

Even if you are building the house for free with cash-out refinance, you still have to pay interest on the money you get as a loan from the bank right? So technically there would still be a finite internal rate of return?

[@smrteng]

@jameskarrie298 Gotcha, thanks.

[@gospelnculture]

The information here is so valuable! This the exact strategy I’m eyeballing to do as my first investment property. Robuilt, you’re one of the best man! S/O to Malaki as well, good stuff!

[@sglsurfing418]

This was good stuff. I'm going through this process right now. Reminds me of the old Robuilt content!

[@iiio12]

Good idea but only in a growing market. Right now the winner here is the bank which offloads the risk on the owner and gets their fee + 6% during a free fall.

[@martin_wood]

Malaki dropping gems! 💸💸💸

[@kyleb1984]

The thing is... everyone wants to buy a 2nd or 3rd, 4th etc. rental home. I guarantee in the next 2 years. The market will be flooded with rentals which will drive the rental prices down. Then what will you do? The rental prices are inflated and have to come down sometime.

[@IRLSuperb]

Depends on your LOCAL saturation. Some areas have much more opportunities than others. It’s not he same on every state or zip code

[@astan5326]

Awesome video! I work construction currently but want to go into developing homes

[@FRMillionaires]

Calling it "free" Is misleading. The money you "got back" is a loan. I know you make a quick point to point that out, but it doesn't stop me from feeling click baited.

[@elissagarza1704]

Rob, a question, what about the area, usually opportunity zones are not well looking and sometimes not safe zones, how Airbnb guest feels about arriving in that kind of neighborhood, can that affects your reviews? and later your business, most people comments on the area and if they see something weird, they can easily say the area is rough.

[@danreviews23]

This happened to me in Houston actually.. let's just say alot of comment or reviews saying the neighborhood was not the best.

[@rickertpropertygroup]

What size homes are these? $150K, $178K for construction? Is that excluding land and soft costs? What is the /ft. Cost roughly. Thank you. Mark

[@Investlyy]

Would love to learn more about how to utilize your amex gold or why amex platinum is even better to construction costs/materials.

[@rebekahmandley8627]

BRRRSTR!!! Where's the merch?? LOL!! That should be on a T-shirt and said T-shirt should have a cape!

[@Ricocase]

Price of land + Price of home = $200k Refinancing for +50k may cover land, but after holding/building costs + construction loan interest? Someone bnbs in the hood for $+350/m? $60/night ...maybe. Construction loan at least 7% ($700 per 100k) mortgage plus land loan/cash...after holding costs 🤔 That 25k land lot acre was a steal, +45k credit for land hold and 3 way split. Have to find a nice appraisal in an opportunity zone. Consider plum card for net terms. Salute 4 rebuilding the hood. Morehouse!

[@RolandHenderson-StPaul]

What if you don’t have a Amex card ? How would you be able to fund the lumber for the new construction ?

[@whatta7793]

Platinum is much better than the Gold IMO. The Gold is great for dining out, but the AMEX Business Plat is PERFECT for his niche.

[@edwinmachado7964]

This is a gem of an episode

[@derricksaunders5280]

Here my question. If your positive cash flow is +$350 mo. How are you profiting if you a few months vacant . Then add high property tax then capital gains tax .

[@Dipper964]

So do you cash out refinance, buy/build another house, pay back the previous loan after doing cash out refinance on that new house?

[@juanpineda-montoya]

Awesome how the money flows in the building process

[@dronemodetravel9259]

12:15 is he saying, only if you find comps? What does comps mean? Let me know please :)

[@zboy2855]

Comps are other similar properties in the area that have sold that you use to gauge how much your property will be worth when it's finished.

[@lokijordan]

Sounds great for an invertor or entrepreneur. However, this kind of thing may also contribute to the dearth of affordable housing and rise of homelessness in an area if this approach becomes wildly popular.

[@DaciaMassage]

Where are they? These numbers are so low. I'm in Washington state You can even rent a bedroom in someones house for less than $800 here.

[@Truelille.providence]

Excelente ❤

[@beautyandabuilder]

Loved the video! Super great ideas and lessons in the video... however how is he building these houses for so cheap? Like is he doing owner builder? and if so does texas law allow it the be an investment within the first year? If not is he using someone else's builder license? Or is he a builder himself, because in that case it wouldn't be so attainable for the average person. Hoping to have this clarified to look deeper into it!

[@JesseVasquezAirVenture]

Such a good strategy! Solid info dudes 🤘🏽

[@javierchardon9802]

Hello, when you say can i build it for 75% of the value? That's including the price for the land?

[@willthethrill8661]

not sure opportunity zones was meant for this bud. But def props on doing it right from A-Z nice work for sure

[@philippedros7752]

Doesn't make sense to pay with a cc. Most lumber yards will give you a 2% discount if you pay within 10 days.

[@cmdv42]

💯that was amazing! 🙌 Would be awesome to see more of these, and about any prefab ADU/tiny homes that would cash flow! 💎

[@marcuslane3]

Not sure what percentage of the loan you can refi if at all possible..great question

[@rafaelordonezjr6149]

Waw. I watch BPal the time didn't know u had a Chanel. Cool

[@richardmarkham8369]

Insane how cheap land and houses are and what the short term rental returns are in the US. Alas, for us over the pond in the UK, land with planning to build on costs a fortune, as does built property... A £400k house can be rented for £100-150 per night here. Unlikely to even cover a mortgage.

[@Vipulschannel]

I love the brrrr strategy , did it with a regular rental

[@SB-yd2cm]

I know they keep saying "free." But to my understanding you're borrowing money then building then refinacing and you have to pay monthly.... isn't that just loaning aka mortgaging a house?

[@scott2744]

OK, Rob, please advise on this. I have an Airbnb in Columbia, SC, I pulled the listing from my previous management company, and hired another well known company to market it and manage it. I live in WA State and just took a trip down there to re furnish it and make it look good, we were about to go live, and now I've been told that zoning has changed and I cant use my house as an Airbnb it has to be booked for 30 days or more at a time. What is your recommendation? Please help

[@mikem8481]

There are 12 hospitals in the Columbia SC area. I would look into mid-term rentals - travel nurses, IT professionals, etc. They will usually need a place to stay for an average 13 week contract and will pay a premium for a nice, furnished property. They tend to use furnishedfinder to book a place.

[@scott2744]

@@mikem8481 Thank you, I listed with Evolve, do you think they reach out to the furnished finder market? Also with me having it listed with them can I still market it myself on furnished finder if they don't?

[@kelseyferro]

Sara was right! You are famous! Really bomb video!

[@joannegarcia4531]

Question, when doing this, is he the general contractor? Or is he hiring a general contractor?

[@savingrob]

What does “comps” means?

[@gandr.e.5136]

"comparable" properties in the surrounding area.

[@tastesandtravelsnounee]

How is it FREE when you refinance and still have payments? Can you please explain? Thank you.

[@zboy2855]

It is free in that you end up getting the fully built house and land without any net money out of your pocket. Yes, you have a monthly mortgage payment, but that is paid for entirely by your tenants/guests, plus extra money left over each month.

[@richardboyle2829]

This dude is so smart

[@abeeiland2996]

I am truly inspired by the younger generation making home ownership possible for everyone

[@cominhomewithjohnalan9103]

What is an “opportunity zone”?

[@JesseVasquezAirVenture]

100% bona fide genius strategy

[@meccawebb9050]

I got lost on purchasing the wood with your American Express card and you build up points. Where I was lost is you said you took your line of credit to pay off your credit card that’s the part that confuses me at first I thought you said you took your points and paid off your credit card help me understand this.

[@layoungdiddy]

I’m always trying to build up my real estate pro folio but just starting off the part where most people gonna get stopped in their tracks… He said his first house he”Did something some how and got $165k IN CASH to pay off that house. That’s most people out right there how many people can get $165k in cash. A tiny bit. And if you in that position where you can. Well yeah, making moves and invest are easy you got a huge some of money to start off wit.

[@Time4aKiss]

How do you pay for the loan while the house is being built? Do you use credit cards too?

[@jackies35]

It depends on the term. Some loans start as a net-90 and then become mortgages. Check out or call your local credit union. I would have some cash on hand. I know what you mean, so double-check with your bank. I would now build that relationship with credit unions or your bank.

[@erikbrutsky6640]

How realistic is it to get a construction loan right now?

[@aarondallasii9303]

I’m from Houston too bro!

[@youngkillazpr]

Great info and video

[@Miami305Nights]

Hey Rob, I need your opinion on the Smokies. I'm trying to decide on a 1.2MM cabin in Gatlinburg or 2 600K cabins. Thanks in advance. This will be a cash deal and or 1031 exchange if it helps your answer. Best,

[@lal5555f]

4 300k haha

[@Ryangle3000]

This one is awesome! Thank u

[@jharris9999]

Good show.

[@happymariam4290]

This is gold 👌

[@SquadUp1019]

Gems! Bro GEMS!

[@minimala2253]

Thank you

[@publicproclaimer9724]

Doing this right now!

[@jeremyg469]

Which loan company?

[@publicproclaimer9724]

People’s exchange bank

[@Anastasia-ps1lv]

cool strategy🙏

[@Delos5]

Man $70,000 is still so good for land, basically the cheapest land you can buy in my country is $315,000. So sad.

[@claytonjames4779]

He didn't say if it was 350/400 a month EACH or total...

[@sliv5sliv]

Hey, tell me how a father of 3 who lives in Vermont could successfully do this while making 34k per year.

[@christobar]

Find a person with money who trusts you enough to lend you 200k .

[@DJPacoRamirez]

More please!

[@thefunnyvideos9090]

Great video

[@customhomebuilder]

And it's not free if I'm paying a loan on it.

[@soobv]

It’s free if someone else is paying the bills plus extra goes to your bank account

[@torrieb3860]

It is if you finance holding costs and they’re repaid on the refi😋

[@IdentifyAsRetired]

It is if...!

[@alldopethings]

As a developer myself. All of these things are worked out prior to purchase. If the numbers don't work, the bank won't finance.

[@LiniousRHoliday]

Amazing 🤯

[@publicproclaimer9724]

This video could not have been better timed

[@iwant2stayhome]

That was just want I need to see.

[@Officialrichmartin]

Can someone break this down step by step

[@IRLSuperb]

You build a home, you get a bank to give you a loan for the value they give this home, you then get that money on the form of “debt” that has a monthly payment. You find a tenant to then pay rent every month which will cover this mortgage + profit for you. The house was built using your initial capital and you get it taken care of by a tenant so you don’t have to. The profits stay in your pocket and it’s money for “free” because not only did you get your money back, you are now having extra on top of that. Boom you got a house for “free” and get paid for it

[@richardbinkley8487]

12:00

[@bradmoar7089]

So the bank owns the house you don't, this is what leads to ghost towns have fun

[@byronholman9228]

🔥🔥🔥

[@RockyLopez210]

Finally some content! lol jk Now time to go to Chipotle...

[@evanyates1079]

Is BRRRR really a thing anymore?

[@christobar]

yeah, just finishing a duplex closing on the refi in a couple days. Not Infinite return however, getting a 30% cash on cash return.

[@marcj3757]

@@christobar Sweet! What state is your Duplex in?

[@GrulkeLamonte]

14/2 wire ran for outlets?…..lol no good

[@brewer404]

This is a great strategy but time value of money is in play here. If you build a house for 100k and the do a cash out refi after 18 months and you get 100k. That 100k future value is not the same as the past value

[@kevindevargascpa7790]

Thanks Poasting

[@brandon-built]

I'm using the same strategy as Malaki. I have a similar video on my channel with a lot more detail on how to actually pull this strategy off on a higher end property.

[@rubenmunive5811]

Sir. Rob

[@GsrMePlease]

Yeah, hope you have the credit to cash out refi 10x in one year. That’s literally having to buy a house every time.

[@costakonti]

lol it is not free if you have repayment on it. it is paid off from income you receive until you recoup your initial capital, nothing is free!

[@Riquezes]

Free house? Tell me, if occupancy falls significantly who is responsible for paying the bank? Careful with the way you market this content as this is certainly everything but free.

[@patrickbellefleur5508]

Yea, thats the catch with debt.

[@phinsup402]

KZbin finance bros do it for the views. Real financial advice is slow and boring but real.

[@emmanuelgutierrez8616]

It's better stated as free cash flow, but after 20/30 yrs it will be a paid off meaning it's a free home. The numbers are done very cautiously to make sure there's always a renter at lowest price possible. The crash happens on the equity value on the property not on rental side, it's just fluctuates higher or less, but minimum is easily achieved with pros.

[@patrickbellefleur5508]

@@phinsup402 Big facts. But honestly as I get older all that technical financial stuff means nothing. You can take the most complicated thing and dumb it down to the most basic thing.

[@patrickbellefleur5508]

​@@emmanuelgutierrez8616 If no one leases that house, the owner is paying the mortgage IF he has the money.

[@DNOJ]

Is that a small house that’s new ??? How is that possible!?!? Someone fucking tell home builders !

[@carlbausemer4077]

The homes aren't free if you have to pay a mortgage.

[@rinakat5783]

A renter is paying the mortgage. So “free” meaning that he is not spending his own money on that mortgage. In fact, the renters are paying the mortgage plus some.

[@IRLSuperb]

@@rinakat5783 exactly. The money doesn’t come from your pocket

[@porchard3628]

Free house lol

[@marconava2430]

Why is rent so cheap compared to California lmfao

[@CyrusMurphy]

Seems a shame perfectly good new homes in opportunity zone become STRs as part of "the game". Hopefully a win-win, this guy makes enough in the short term to make investment worth it and then they convert as quality affordable LTRs for those that need it

[@anthonylowry9690]

And this kids is how something like 2008 occurred. Cause rent and prices only go up.

[@betterhomesnc2437]

Different issue.

[@langar5249]

This comment shows you have no knowledge whatsoever on how the 2008 crisis occurred.

[@jackies35]

@@langar5249 I think what he is saying... After the pandemic, prices went up on rent. However, the price of land went down. In 2008, homes went down (crashed) and everyone grabbed and hold them.

[@merlabel1253]

If he keeps over extending himself. The banks could call his notes. I smell bankruptcy coming.

[@betterhomesnc2437]

Doesn't seem like overextending. He is just shuffling his debt.

[@jackies35]

He also offers short and long-term leases. When it's time to sell, he will and could. Smell victory!

[@christobar]

Banks only care if you're not paying.

[@Ricocase]

8.6m supply in Houston. Who appraised it for 200k+?