Real Life Example of BRRRR Real Estate Investing Method in Canada

[@junyu3453]

I can not believe that i missed this video 3 years ago. Otherwise i could have been retired now. Now the time to take me to their is longer though still doable. Thank you Matt!

[@CanadianRealEstateChannel]

Thanks for the support

[@faisalbilal3840]

Can you tell me what he said at 6:45?

[@smagalas]

Matt, Your videos are pure gold! I have a co-worker that has 14 properties in London using a similar method. You answered every question I had and gave me a huge list of learning resources. Thank you for taking the time to make them!!

[@CanadianRealEstateChannel]

Thanks Scott! Your comment made my day! ❤ You and your co-worker should come out to LDNonFIRE sometime if you haven't before: facebook.com/groups/LDNonFIRE/

[@smagalas]

Looks interesting. I'm going to try and stop by. Thanks!

[@paulargueta]

Great information. The key is executing and taking action. Too many people watch and do little to nothing with the information.

[@frederiquerobichaud4238]

you answered all of my questions in less then 10 minutes... AMAZING !!!

[@bldfinancial]

Ahaha! Matt's channel has that effect! Loved this comment

[@faisalbilal3840]

Can you tell me what he said at 6:45?

[@TpCo-ok4xe]

@@faisalbilal3840😅

[@TheExcellentLaborer]

How long do you got to rent the property out before the bank will let you refinance?

[@ferreveryday5899]

Love your videos, you brake it down so even someone like me who has been stuck in the rat race for the last 15 years can make sense of it, it seems like every time I have a question you either have a video answering it or it’s in the comments. Keep pumping out these videos please.

[@CanadianRealEstateChannel]

Thanks for the kind words! It’s comments like these that encourage/fuel is to keep cranking out the videos!

[@passport_papii]

So how would you be able to do the REPEAT part if you used the refinance money to pay off the property in the example @4:53 ?

[@passport_papii]

@Cameron38 ahh ok thanks I was a little shaky on that part. That makes sense though. I rather just use the refi on the next property lol :)

[@chase2910]

This is the first video I’ve watched about to dive deeper into the plan

[@bldfinancial]

This series definitely has some insights which could go a long way!

[@Neags]

important to note in case it isn't obvious, your previous cash flow will decrease due to the higher mortgage post refinance, so you use the equity from the refinance to repeat/reinvest in new property thus generate a new stream of cashflow

Great video! Thanks for making it focused on the Canadian market 🇨🇦

[@CanadianRealEstateChannel]

Thanks! Glad to hear you got value from it!

[@embg]

works exactly the same in the US; even the 80% LTV refi from the banks - which applies to LLC's as well.

[@bldfinancial]

🔥 🔥

[@CommandoMaster]

That's a pretty good strategy. The main challenge would be finding a good value property in your area.

[@bldfinancial]

🔥 🔥

[@Jane_is_Tired]

Can you direct me to the video where you go into the first four? The video you mention at 0:11

[@Claire-yz4hx]

(1) negotiate the price if possible (2) strategic renovation (3) 1% rule: gross rent=1% of value of the property (cann't really happen in lots of cities nowadays) (4) mortgage=0.8 of the appraised value of the property

[@jorgepena2349]

Wow man, I’ve been watching many vids and I couldn’t understand , YOU JUST MADE ME UNDERSTAND!

[@bldfinancial]

🔥 🔥

[@bamare12]

What is the time frame like from after you buy to when you rehab to when you find tenants? Are you paying for the mortgage in the meantime?

[@elvis5637]

When you first financed this.house didn't you need to pay closing costs? Also for the refi isn't thier a closing cost? Thats where im some what lost

[@anthonyloprinzi6956]

Hello Matt, great video as always. I do sincerely get a great deal of value from your videos. Keep it up! Anyway, I’ve been doing research on the BRRRR strategy for some time now and I do think it is the best investment strategy for me to pursue in regards to real estate investing. However, there is still one aspect of the strategy I’m a bit confused about. So, I understand that in this example your acquisition and reno. costs came out to be $150,524.28. Which is approximately 75% of your ARV of $200,000. You then refinanced for 80% ARV to get $160,000 back from your lender. You used that to pay off your principal acquisition and renovation costs and ended up with a surplus of $9,475.72. As well as $40,000 in equity that you built into the property. Now, where I’m confused is, if you used the majority of the money you received via the refi to payoff your initial expenses to get into the property, then how and when does the “REPEAT” part of the strategy take effect? Sure, it’s nice to pocket $9,475.72 after the fact, but that’s not going to give you much capital to reinvest in another property in order to repeat the process. I thought the objective was to refinance and use the majority of that money to purchase the next deal. I’m sure I’m just looking at it the wrong way or missing something. If you, or anyone else who sees this comment, could please clarify I would greatly appreciate it. Perhaps you could even do a video that focuses exclusively on the “REPEAT” stage. I think that would be very helpful for a lot of people. Thank you very much!

[@CanadianRealEstateChannel]

Hi Anthony, So let me lay out the example in a slightly different way - and let see if that clears up any confusion. (I'm going to use round numbers, cause I'm lazy). So Buy a house for 120K, 80% mortgage (96K mortgage) on it, so I need 24K cash to buy it. Then I spend 30K on holding, closing and renovation costs. So my total cash needed was 54K, so before I even start this project - I need 54K. Then I refinance it at 200K, the bank gives me an 80% new mortgage for 160K. So I now have 160K -> I pay off the old mortgage of 96K and have 64K cash left. (When I started this process I had 54K) so I now have 10K more in cash than I started with - I then take this money and go buy another property (that's the repeat). Hope that clarified things - but I may do another video on the subject - and if I do - I'll try to make things clearer. Thanks for watching!

[@anthonyloprinzi6956]

Okay, I see what you're saying. Thank you so much for clarifying! Originally I was thinking that you bought the property outright in cash. But you actually financed it with a short term loan and used a 25% downpayment to get into the property. Would that be an interest only loan for the initial 96K mortgage you used during the acquisition phase?

[@anthonyloprinzi6956]

Okay, I see what you're saying. Thank you so much for clarifying! Originally I was thinking that you bought the property outright in cash. But you actually financed it with a short term loan and used a 25% downpayment to get into the property. Would that be an interest only loan for the initial 96K mortgage you used during the acquisition phase?

[@donnywheeler6420]

New subscriber, wish I found you when I was a teenager lol (25 now bought my first duplex at 23) really interesting strategy that I will consider using in the future

[@CanadianRealEstateChannel]

Thanks for watching Donny! That's awesome that you bought your first duplex at 23! I didn't get started in real estate until I was 25! You're already ahead of me 😀

[@CT-zd8jn]

VERY good video thank you. However, why not finance the original purchase rather than do it post renovation etc?

[@realestateron4784]

This was very informative n I will put this to use this year!! I want to get 1-4 properties this year

[@bldfinancial]

That's awesome to hear Ron! Many great insights to pull from this video

[@BrianKouhi]

Doesn't Refinancing at a higher price, also Increase the monthly Mortgage? could this cause problems in terms of cashflow? any tips or clarifications on this? Thanks Matt

[@honestly101]

Oh no, I'm 7 hours late to the party! Matt great content again. I cant wait to come back out to London.

[@CanadianRealEstateChannel]

Thanks Noel!

[@JeffWybo]

Lots of meet ups. For example tonight at the palasad at 8:30!

[@jacksfoodfilms]

What were your expenses on the property? utilities, repairs, cap ex, lawn care, snow removal, etc?

[@vineetkarkera]

Thanks for explaining.. the part I don't understand is that what can be done with that extra 9k after refinancing ? Apart from a home equity line of credit or home equity loan.. coz' unless your income can't support more mortgage debt or if you've maxed your capacity.. can't seen to repeat the process as I found out that only 50bpercentbof rental income is taken is counted by the bank as cash flow

[@clowey]

So does refinancing give you money back like actual cash that you pay off the property for and other costs to reno and close?

[@kunalanand4871]

Bro you mentioned you bought this property in London, Ontario. I doubt there is even a 1 bedroom house in that price range forget the added basement and garage.

[@FreshAirRules]

Well he did say it was rough. When he says rough it may have looked like it had been through a war. But a good buyer sees through mess and filth. Often when tenants leave a place a total pigsty there is surprisingly little actual damage once you've cleaned it up. Mess is not important. Damage is.

[@Prindad]

Fabulous, and inspiring! I'm going to start watching the rest of your videos. Thank you!

[@bldfinancial]

Definitely recommend watching the rest of this series, so many valuable takeaways!

[@echoe4806]

I am just curious if at the first step when you BUY...are you using your own funds? or a line of credit? Great video!

[@MorTakTheBeast1989]

I have a question. You pay 5% cash down : 6 100$ than the bank give you a mortage of 122 000$ Where the 28 524$ for the renovation come from ? Is it money you have already or the bank finance you that also ? That part i would like to understand. Awaiting your answer, Thanks you for your time. Great video !

[@mitchelldyer5415]

What about the interest on that Hard Money loan? If that initial purchase was with Hard Money.

[@michaelyeh1038]

Hi. Great video. Can you share what's your cash flow on this property or your strategy as a buy and hold investor. I am new to the REI and are looking at the numbers. Based on the information in the video. The cash flow I est. is $85 a month after 6 months of works. The assumptions I have are, Monthly income - $1800 Monthly expenses - $1715 - mortgage 810 (160K, 30 years @4.5%) - tax 250 (3K/year)- insurance 100 (1.2K/year)- property management 180 (10%)- repairs 90 (5%)-vacancy/turnover 144 (8%)-cap x 90(5%) - misc. 50 (lawn, snow, trash etc) Please let me know if I missed something as that's a lot of work and time for $85/mo cash flow and the potential risk if one future renter trash the place which can wipe out muti-years cash flow earned. Please share your thoughts. Thank you again. -

[@monsterholics]

Wow am I ever happy I came across this channel!

[@CanadianRealEstateChannel]

Thanks for the support!

[@bldfinancial]

🔥 🔥

[@bruh-7724]

What did you mean when you said that you rented the diffrent parts of the house out in diffrent aspects?

[@jdubski5690]

And also do you ever pay cash for a property or do you normally put down 20%

[@michaelmorin9203]

How did you get the money to purchase the property in the first place ? You didn’t talk about getting a hard money loan or if you purchased in cash?

[@robmeister3928]

Can you use private or hard money for BRRR strategy? What are the pros and cons of each?

[@1redrab]

Fantastic video! Thank you so much! It is amazing to see this and I appreciate you taking the time to make this video. Cheers

[@CanadianRealEstateChannel]

Thanks Riun! Comments like yours mean A LOT to me and are a big part of why I keep making videos!

[@angel-sz5ks]

hello can i ask how about the penalty in refinance?do you get fixed or variable to do brrrr

[@guzman9011]

For this method do you need to buy the property in cash? In other words no mortgage I assume?

[@CanadianRealEstateChannel]

No you don’t have to buy cash, can buy with a mortgage and then refinance

[@guzman9011]

Matt McKeever but it can’t be an FHA loan am I right?

[@TheRzarectah]

@@guzman9011 It can. Hope you've bought something

[@raczyk]

who do you deal with as your lenders? Do you ever go to the big 5 banks?

[@JohnSmith-pt6du]

Awesome video Matt! This is a great plan thanks for sharing!

[@CanadianRealEstateChannel]

Thanks! Appreciate the comment and kind words!

[@invcitus23]

why would you take out another loan that covers the first mortgage and reno costs. you would still have to pay off that extra mortgage you took? unless did you pay for the house with your own capital?

[@Grangeca]

What is the cash flow on this situation. the new mortgage vs collecting in rent. Could of added that to how you made out as well on this deal

[@ashurz2412]

dont you have to pay the loan back from the bank when you refi the house or is it just put into a higher mortgage ?

[@naveedsiddqui6101]

Hi Matt, liked your video very much. But did I missed something regarding how much $ the investor should have to get the private investor, and how paid for RENO....

[@pacedelacruz4913]

Question: Where/How did you get deposit for 122K house which, in Canada is 10% so 12,200$ AND cash to do/cover 28K for reno and closing costs?? Thank you for your videos

[@cratelab]

He's under 500k in Ontario, so he only needs 5% down ($6100).

[@NachozModz]

Are there any costs between the buy- reno period? If you have an intiali mortgage on the property, you still need to pay that entire month mortgage out of your pocket since you wont have a tenant in place right ?

[@AlexNasatka]

Great video! This really opened my perspective on real estate investing and it it's helping to motivate me a lot to buy my first property soon! 💰

[@CanadianRealEstateChannel]

That’s awesome!

[@alexc4426]

Do you refinance after you get tenants? Does that increase the refinance amount?

[@JoshOnGuitar]

What did you put down on the property and how did you get the money for the repairs?

[@niranteo5319]

Thanks Matt this all makes sense and is a great break down for beginners!!!! My question is do you recommend get someone to get someone to manage the property is you live out of town. Also these deals you get in the houses where do you find them? Any realtor?

[@yzftusa]

Great explanation! Thank you Matt!

[@bldfinancial]

100%

[@devinbirkby5912]

What bank are you using to refi? Do you typically talk to the bank before to get pre-approved for a refi before purchasing the house?

[@jbare777]

Thanks for the videos. Really ingenious. Not my path to wealth but great to know.

[@CanadianRealEstateChannel]

Thanks Joshua! Appreciate you watching - what's your current path to wealth look like? (I'm always looking to learn and add new streams to my income).

[@Jake-sg1xr]

A lot of banks here in the US have a 6-12 month seasoning period before you can refinance

[@jdubski5690]

Basically an infinite return, also when you get loans on your investments what types of loans do you normally Prefer and do you do interest only loans?

[@calebhill9191]

I have a question about this strategy. Would this work for smaller properties? I'm talking like a mobile home or a very small single family? I love the idea of investing in real estate, but I just don't have the money to drop down a $26k down payment. Also, couldn't you get some quick cash for a larger down payment if you just sold the property?

[@vadimkozlov3008]

Got 120K CAD I been trying to figure out how to invest and this is now seeming to me my more favorable option. My only thought is I wonder if I could do a full serviced short term rental accommodation to increase cashflow by renting on Airbnb. Not sure if the headache of dealing with the high turnover and unstable rental efficiency is worth the reward, perhaps if I have enough units to justify hiring a property manager. Based on my research of the market I am currently looking into I could make somewhere between 2% and 3% of the market property value per month renting this way. I'm not inspired to take this all a step further and make a youtube series of my journey. Thank you for this great content and I hope to one day meet you. :)

[@stacymoreau5492]

Hi Matt! Love your videos. Do you use private lending for your initial purchase or do you get a mortgage? If you start with a mortgage, do you do the refinance with the same financial institution? are you charged early cancellation fees? Thanks!

[@steveabdullahyourrealtor7222]

Hey this sound great but there one piece of it i have a problem with refi in the united state if you refi your interested rate can change what if i have an awesome interested rate and i refi on a 30 year loan and i get a higher rate you may get 10,000 in equity but you will be paying 4000 in more interest over the full loan ...that was a example .... Plus to get house appraised is 500 dollars

[@jaygee8216]

What would make more sense? to washout refinance when you have the opportunity to OR obtain a Home Equity Line Of Credit (HELOC) ?? thank you

[@ewlinitis]

What was the closing cost for th4 refinancing though ?

[@marcelagalindo5754]

I have a place in Canada, how can I refinance my rent property or what do you think I can ask my bank to do that?please and thank you

[@jackowacko9626]

I would like to attempt this like you said it sounds scary for me as a first timer. So what can you recommend me to do? are their mentors out their that can guide me to the process and if so where can I find one?

[@ZoobiVan]

Is the monthly rental income taxed? If so, at what rate? I would like to get an idea of the cashflow from this example.

[@SuniiTakeOff]

Hey this is a great video. Im just starting off wholesaling however I haven’t found a channel to explain how to take It to the next level! I will share !

[@CanadianRealEstateChannel]

Thanks for the support! What market are you looking at wholesaling in?

[@RodrigoMedeirosRM]

Confused on one part. How did the 9K materialize? If you had a mortgage for the original 122K then paid all expenses, and you refinance. Wouldn’t the bank just add the 9K into existing equity ? How did it become liquid cash?

[@captnhan1k75]

Awesome vid Matt.. I think youre the only one that goes this deep into the details, it builds a whole ton of trust within your audience when you open up like this. Question: I havent seen any vids of you talking about this, but what is the benifit of buying with an LLC? I see a lot of posters on Biggerpockets suggestig to buy with an LLC but I dont really understand the benifit?

[@CanadianRealEstateChannel]

+Captn Han1k the benefits of buying in a Corp or llc is really depends on the region your buying in - maybe I’ll tackle it in a future video! Thanks for watching!

[@justWIN96]

This is my first video ,I love the content! I'm 22 just graduated university and currently on the job hunt, but I want to start real estate investing... My question is should I be saving money for a property or real estate license ? I just want to start applying this knowledge. Anyways keep up the good work guys !

[@meetmeinmontreal]

PROPERTY always.

[@tysonadams5751]

Is that first purchase of 122k financed at first or straight cash ?

[@anthony_adams91]

Can you do this for your first time if your using a convential Loan ? With renovation and everything Or would you need personal capital for the renovations?

[@RychRE]

Matt, when you refinance, do you have a new mortgage payment ? I imagine you would, and then it would lower your cash flow if not make it a negative cash flow ? Pls respond 🙏🏽

[@Dream11Cricketinsider]

What was downpayment... did you pay whole price of that property?

[@DoujoneMcLarty]

So in buying my first home if i want to buy an investment property and live in one of the units will i loose out on the first time home buyers rebate?

[@mervinmorganjr]

Great video. The only thing you're missing is the closing costs for the refinance. Am i seeing this wrong?

[@1life2liveone]

Can someone or Matt tell me if he got two mortgages on the house. Did the second refinance mortgage replace the first. and if so did Matt pay for legal fees twice? Once to buy and once to refinance?

[@matthewroberts1255]

How long did you have to rent it before you refinanced? BRRRR is great if you can get your money out quick. Waiting 6 months to a year though is rough. Also, how do you do the rent calculations assuming a new mortgage value?

[@thebestclassicalmusic]

Hi Matt: I am from Canada and binge-watching your videos. Curious what the cash flow was on this deal after the refi

[@stevenroshni1228]

Watching from New York, curious about how it goes north of the boarder.

[@AberrantArt]

Also curious to know what the cash flow was and can this be done in B.C.?

[@chandrakantmahapatra1317]

What was the cash flow on the deal after the refinance?

[@jmora6529]

What about refinance closing costs and the higher mortgage payment after refinance?

[@RichardxRunit]

Confused learner here, how do you manage to pull out that 9k in cash from the refi? I understand that you’ve created 40,000 in new equity (160,000-122,000) but shouldn’t all of that go towards your mortgage???

[@JeandrePetzer]

So how did you get enough of a grace period in paying back the 28k in reno costs for you to get the renovations done and the place refinanced?

[@itismesteve]

Hi, what was your initial loan value? Did it cover the cost of property plus rehab or were you out of pocket for that? Thanks!!

[@maximtheconqueror]

I like the intro very informative!!!

[@CanadianRealEstateChannel]

Thanks Carlos - glad you found it useful!

[@user-zd9fc4vs4q]

The seccond you mentioned Jeff Wybo I knew you were in London Ontario too & this is the first video of yours I've watched.

[@bldfinancial]

Happy to have you on board! Matt's content is killer!

[@lewisHelps]

Great information, this is a powerful real estate investing strategy interesting to see how you added value to the property. I have a similar video involving a flip property that i turned into a rental. Thanks for sharing this deal with us.

[@bigkz34]

How much was the mortgage before and after

[@ajrichardson4318]

Did you factor in the cost of the mortgage over the renovation period or was that included in the given budget ?

[@raczyk]

How is this tax free, thought tax free is only on a personal property? Will you be paying capital gains on the property if you choose to sell it in the future? Another question I have, is that a new build home 1 year ago, but don't live there. Would I be able to rent out my principal residence? Would I have to refinance the mortgage to an investment property upon mortgage renewal?

[@michaelm9621]

Such a good video, keep it coming.

[@CanadianRealEstateChannel]

Thanks Michael for the support!

[@bldfinancial]

Absolutely!

[@msuggs2230]

How did you determine what your rent amount was going to be monthly?

[@juanescalante5321]

Very powerful info I want to get into the real estate game

[@CanadianRealEstateChannel]

Thanks Juan!

[@JeffWybo]

Keep us posted on your first place!

[@itechtool1053]

Do you have to pay off the home right away after the refinance or i can keep all the money and reinvest it into another property?

[@CodyDunlap]

Thanks for making these vids I’m so excited I found this!

[@CanadianRealEstateChannel]

Thanks Cody!

[@frankanderson21]

Matt, what's the difference in the refinance % (80% in canada) that the bank will give you towards the value in the US?

[@chandrapeay1703]

How does the work with your debt to income ratio? Will this debt stop me from purchasing another property?

[@abeness88]

Does Brrrr work only if you pay 122k cash? Or also if you do a 30 yr finance? Thank you!!

[@josuedelatorre3107]

Can I work this method but instead of using a hard money loan, get the property owner financed to me?

[@smilez7696]

Liked and subscribed before you could even ask me too. Great info man.

[@Matt-Legrand]

In the $160k loan, what is the down payment?