The BRRRR Method Explained | And What NOT To Do

[@FasterFreedom]

Great video! We have done the BRRRR over 300 times in the last few years. There are definitely things to do and not do. Good job!

[@ronfade]

Great channel just subscribed keep it up looking to do my first brrrr in the next 2 months scoping around potential deals atm

[@ChandlerDavidSmith]

Congrats! That is great!

[@FasterFreedom]

ronald fadehan Love it!

[@JackDuffley]

This is where multifamily can have a distinct advantage - rent bumps have a direct impact on pricing where they might not with single families. You have a lot more control over what the ARV will be in many cases because of that.

[@ChandlerDavidSmith]

Exactly

[@LoriLivers]

yes!!! You MUST know your numbers so that you don't get burned. The hardest part of BRRRR for me is finding the property to buy. i talk about it a bit on my channel - but this is certainly the biggest challenge in BRRRR for me.

[@cameronbethuram]

Chandler, this is probably the best overall review of the pros/cons of the BRRRR strategy I've come across. I'm looking at working the BRRRR strategy soon and this overview gives me some great pointers I need to do before starting the process. Thanks for the insight and I'm moving on to your "Run the Numbers" video next. Have a good one and thanks again!

[@topcomment3816]

Want to know what makes the BRRRR even better? Doing it to multifamily. I buy off market properties and get them below market value. I purchase with a loan, raise rents, refinance a year or two later. I have several small apartment complexes with heavy cash flow and none of my own money tied up in the property. 😀

[@ChandlerDavidSmith]

👍👍👍

[@anomaly2422]

I have a question when starting with no amount of money or at least 1k can i do the brrr method? He only said Buy not get a loan from the plan to buy a house then rehab then rent

[@adiosmiamigo]

Where and how do you get small apartment complexes below market value?

[@silverback3541]

@@adiosmiamigo try calling real estate companies in your area and ask for the contact info of agents that deal with multifamily and apartment units. Technically they all can but some people are better at it than others, you want those people. Give them the parameters of what you can purchase. Now back to your parameters just be straight up and tell them I can afford a purchase price of up to $500,000 and I need to have at least 10% equity coming in the deal so I need something that needs a little bit of TLC. That's the short end of the stick or look in public records, cold call/send a letter to the owners and or management company and tell them your interested in their property

[@CaseyBurnsInvesting]

Gucci Mane would be proud.

[@ChandlerDavidSmith]

😂

[@jeffreyhall4585]

😂😂😂😂

[@cornels020]

😂😂😂

[@modou6349]

😂😂😂

[@0309jph]

😆

[@Lukas-yf7hw]

Great video as always! I would love to see a video series where you go more in depth on each steps of the BRRRR method. This video was super informative but I would love to learn about the small little details that go into each step.

[@ChandlerDavidSmith]

Great idea - I’ll get on it

[@LifesPreciousxo]

I second this

[@facebookninja4085]

We ran into this with our lender where we ended up leaving our money into the house. We didn’t understand their percentage schedule well enough when we bought the property. Make sure you’re aware before you buy.

[@Abby_cat47]

This is EXACTLY to the numbers what I am in the process of right now! Just bought a duplex for $55,000 in cash, and am starting the renovations soon. After 6 months, based on comps, it will be worth $110,000-$120,000. Thank you Chandler for providing the perfect example!

[@ryeann2567]

Where are you finding multi-fam units in that price range? Congrats!

[@Abby_cat47]

The heart of the east side, Detroit. I wouldn't reccomend it to someone who's not local, Detroit is quite the animal to learn market wise.

[@vacuumbed1]

Great explanation on the BRRRR method, thank you.

[@ChandlerDavidSmith]

Thanks a ton!

[@johncolorado1061]

this is the earliest i have ever been Hello Mr.Smith

[@ChandlerDavidSmith]

Hello!!

[@Grannyknockers]

What properties and where are rentals passing the 1% rule? Where I live, a 3 bedroom townhouse worth $200k rents for $1300-1400 a month

[@robc6310]

Know your numbers! Great advice Chandler! Need to get caught up on your recent videos

[@ChandlerDavidSmith]

Thanks!

[@robynimperatrice4010]

Your so good at explain things and really breaking it down! Thank you!

[@Fc-qi1vy]

GREAT VIDEO for real

[@HowToDIYMoore]

I think you should go over a HELOC I haven't seen it in the course yet either. Do you recommend a HELOC? Have you ever used a HELOC?

[@christophercowell5653]

Chandler great content and love your videos! I would love to see a video where you explain how you procure a property once you find one, run the numbers, and want to proceed. Specifically how to lock up a property while you do your due diligence and when do you negotiate price. Thank you. -Chris Cowell Okc, Ok

[@youtubecarspottersguide1]

the hard money lender want a down payment 30% ? and I have to qualify for the loan ? make those payments for 6 mos or so ??

[@Yayo509]

hey chandler, so how do we buy right in this crazy market?

[@joeydefaria4941]

Great video! Would you recommend utilizing your VA loan before starting your first BRRRR with no other debt at all.

[@joeydefaria4941]

I'm trying to house hack my VA loan

[@bigd5364]

Excellent & very simplified explanation

[@raygrenade1697]

loved this video, took down some notes!

[@ChandlerDavidSmith]

Awesome!

[@omarochoa5807]

The best explanation at all times! I love it. Thank you!

[@lyricspencerbooks8467]

The banks can deny you at any time. It doesn't even matter what they say beforehand.

[@TheFirstRealChewy]

As long as you can cash flow the total cost with a good return rate, then its a good investment, even if its not a BRRR.

[@geno816]

How contorted are you buying property out of town. What research do you do to make sure it's in a good neighborhood, is a good property, etc.

[@jessthemess405]

Chandler, you mentioned that you have to have good credit to be able to refinance. How does that work when you have an LLC?. I know that you don’t need an LLC for the hard money loan, but what if I want to refinance with it?

[@easonkaci]

Possibly try building business credit so you can use the ein under your llc instead of your person credit . Get an ein for your llc , duns number and start building biz credit ! You can build it in 60 days if you’re dedicated

[@tylerclark-realtor]

This sounds like a great idea. I plan to start investing in a few years. But I’m super nervous about having that many mortgages on a rental. How many BRRR’s is to many at one time?

[@johncolorado1061]

I know of a property that I've been eyeing for months and it does need work i went inside when the owners showed me i had no idea what i was looking at. I think brrrr would be good for it but also wholesaling it wouldn't be a bad idea either

[@CarlosLopez-ns1vd]

What if you can't get it rented. When do you start making the payments? Do you have to have it rented before getting it refinanced?

[@peta23]

Can you elaborate on why using your own money is a terrible return? If you front the money, then refi and walk away with 20k extra that’s nice. But if I use other people’s money, and get that same 20k, it’s a much better return since I didn’t front anything. Is that what you mean?

[@daveg5847]

This is my first time really looking into this and I'm intrigued but I have so many questions my one question is can you get financed to buy the property and still use this method

[@TheCardboardWarlord]

Pulling out equity affects your mortgage payment which affects your cashflow right?

[@blessonbiju59]

Didnt understand why it should be all cash , in brrrr method , we can buy using a mortgage yeh ?

[@michigan_616]

Any good video recommendations for ensuring our numbers are solid?

[@jayc4715]

This strategy is kinda scary now ..due to the eviction ban

[@melodyn6419]

If your properties are under LLC, what percentage of positive rental cash flow will be considered good by your bank for refinancing purpose?

[@bradenheppell5771]

Hey Chandler, do you have to buy the property in cash? Can you get a normal loan, and then refinance after it's fixed up?

[@ebonywaddles6428]

That’s what I’m wondering also. Did you get an answer?

[@nickh2053]

Of course. But if it’s owner occupied you need to wait at least 6-12 months.

[@diydame7863]

What procedures do you recommend if your renters don't pay you and/or vacate a property? What's the average length of time they have to vacate once all the legal notices were processed to vacate?

[@jayc4715]

How long would you have to wait to accumulate enough rent to show your bank that the first home is indeed a cashflowing rental property ..in order to qualify for the next mortgage

[@AberrantArt]

Hey Chandler, how would you suggest people avoid having a hard money lender or private lender steal their prospective property? They find out about this great deal and buy it themselves instead of lend you the money for it.

[@shamsharma2128]

Exactly because you have to explain all this to them ,then they go and buy it them selk and not give you the money.

[@AlanCorey]

Yes, BRRR is a great way to make money in real estate!

[@ChandlerDavidSmith]

Yes!!!

[@lionheart93]

Hey Chand, but don't all hard money or private lenders only do up to 75% of the ARV?

[@optimoefpv2302]

Le0 75% of $110,000 is $82,500

[@lionheart93]

@@optimoefpv2302no I meant in general. I have hear some lenders do up to 80 or even 90% but I haven't been able to connect with one of those.

[@Shakeel_Akhtar]

Chandler “Here’s the Deal” Smith.

[@ChandlerDavidSmith]

You’re so right 😂

[@SimplySport]

Would this not be able too work with a cash deposit of let’s say 20k on a 200k property or is it that I need to have the whole 200k?

[@nawidshinwari9258]

I’m in love with this guy!

[@LilRobbie-hs3rg]

What would be the point of paying off your mortgage with the refinance loan because wouldn’t you just have to pay off the refinance loan anyways

[@stephaniegrable2612]

Great advice!

[@Jfofito]

Hey, can someone answer when exactly do you get a Brrrr project you’re working on pre-approved with a bank?

[@azu555]

Thank you for this

[@ChandlerDavidSmith]

Of course! Thanks for watching!

[@jameswashington1083]

Hey Chandler, does this method work well with a property that I paid cash for...it's my first property?

[@sunsetrider3173]

Can you explain why it should be all cash?

[@Zaerki]

Chandler: $55000 for a property is ridiculous Me: *laughs in Detroit*

[@ChandlerDavidSmith]

😂😂

[@arieliviocruz]

For real south florida is so hot market

[@IshFlipsWhips]

Me in Cali 😐

[@Abby_cat47]

LOL That's my market! Just got a duplex for that price!

[@paullightfoot9028]

Do you need to be Owner Occupied to Refinance for CASH OUT at Closing?????????

[@AustinCarterYT]

amazing video!!!!

[@luisesquijarosa9968]

Very cool

[@dyamigadiel5649]

Can you give us an real example from one of your investment properties and how much money you make from that property?

[@natedawg1275]

Maybe I'm missing something here.. I am sure that you said but it cash then rehab.. so why would one have to wait to refinance if you didn't finance it to begin with.. I'm confused or is it an oversight... BrrRr... Well if I had enough cash to but it this method isn't entirely correct.. buy rehab rent finance repeat..

[@loganquill480]

Brrrr strategy doesn’t say you have to buy in cash. It’s actually better to get a fha and then rehab, rent, refinance.

[@myth2204]

When quit-claiming the property over to an LLC, do you obtain permission from the lender? Is their written consent sufficient to nullify the possibility of them accelerating repayment anyway? Have been wondering about the best way to do this.

[@bunburychic9755]

For a newbie, what's a typical rate you'll get from a hard lender?

[@dakotathompson8062]

Very high

[@Karischmidt]

Great video!

[@FantasySports_Sitch]

What’s the best website or company to screen tenants ?

[@jaxx-_-123]

Couldn’t you just do a 30 year conventional loan for the initial purchase, do your improvements, rent and then do a cash out refi? Why do hard money loan I you don’t have to? Am I missing something?

[@alondraeller6248]

What if you house hack during “rental” stage of BRRRR, what would the bank say?

[@bmoore1532]

that refinance is really hard right now w/ the seasoning period.

[@charliecane117]

can someone explain to me who owns the house at the end? when the bank gives you 77% of the value does that mean now you have a mortgage?

[@Mimi33948]

Yes. You do have a mortgage but the rent I guess is supposed to off set that provided you rent it at top dollar

[@AscendVista]

What do you mean by principal pay down?

[@SuperElectricpatrick]

Could have used this 2 weeks ago. Trying to refinance now. Anyone know a good lender?

[@PaulMacalusoLV]

I'd be interested in knowing of you've made a video in the past that walked through a property you personally used this strategy with which showed real #'s for that deal. Please let me know

[@Concept_Angie]

How does dti work when you go to refinance another home? Does the 70% you took out on this home affect your ability to refinance the second home?

[@clayburks9914]

The cash flow you get from a tenant normally takes care of that

[@Concept_Angie]

@@clayburks9914 thank you!

[@Mimi33948]

To do this multiple times will your income to best ratio stop you from refinancing multiple properties? Thanks

[@petsuasion6096]

What if you sold it on an LLC ur wife own would the deal be the same?

[@patricialewis4239]

Thank you

[@tonydeeds6977]

But you still have to pay the bank back correct?

[@shatexposure4467]

Chandler do you know anyone that’s started using VA loans?

[@ezequielmartinez3582]

We talking residential here?

[@yzhang9265]

BRRRR assumes that the rent income continues without interruption, right guys? If I have 5 properties on mortgages of 100k USD each (and 100k USD cash in hand from the 5th property mortgage), it means if the rent stops, I am liable to cover monthly mortgage of all 5 properties. Right?

[@Mimi33948]

Hummmm good question.. but I would assume so . You make sense

[@bryanbuilds4255]

So my scenario is I already own my primary home, well I have a mortgage on it. Time plus my renovations has given me about $45000 increase in value from purchase price. My total equity would be roughly $100k. Since I provided the down payment for a conventional loan, how can I use this strategy to work in purchasing or at the very least providing a downpayment for my next property. I guess how you explained it is that you are either using hard money to pay cash or your own money to pay cash, personally I would rather use my own money. Are there instances where you are just ponying up enough for the downpayment, then rehabbing, then refinancing and using that money for the next place? (As long as you are still cash flowing of course). I understand what I am describing isn't as clean as what you spoke on but maybe you could provide a bit of clarity on my specific example. Thank you!

[@rickyraindrops3640]

great question.. same situation i am in..

[@nickh2053]

You’re at the “refinance” step. So refinance.

[@tetheredhands]

What I want to know is how all these brrrr guys are getting these low renovation costs? $15k to renovate an entire property? Assuming you’re not doing it all yourself, how do you find these inexpensive contractors?

[@ashleycowen5104]

BRRRR is like fishing...for really big fish...that could pull you right into the water...deep water!

[@tylerjohn5999]

Hey why does it have to be cash?? Couldn’t you do an FHA loan for 3.5% to buy it?

[@chrisamanda8598]

Pretty sure to get that rate you have to live there

[@jonathanmazambi]

I pray to God everybody stay safe in this corona pandemic and yeah hopefully my channel also grows this year

[@ChandlerDavidSmith]

Same

[@arieliviocruz]

Been trying to buy good deal under value narket with 20% down but never take my offers So i guess i will have to barrow money to make cash offer refi just to get the investment out and pay out money barrow

[@shrimproll9465]

Do you have a BRRR + House Hack Combo Video?

[@spunky181]

This example works in Michigan. I’m actually buying a house with these exact numbers LoL

[@mce32]

Chandler, you really need to invest into a better camera. Your face is blurry when you zoom in. Great content though. Thanks for doing these videos.

[@ChandlerDavidSmith]

So in the top right of KZbin you can click the quality you watch the videos in. Were you playing it in 1080 P? I spent a lot of money on this camera so I get very disappointed when I hear this ha ha I would love your feedback

[@carsnob]

His camera looks amazing 👍🏼

[@mce32]

@@ChandlerDavidSmith I am not saying it's awful, but when compared to Graham's or Kevin's videos, your videos look less sharp. I am not an expert in cameras or lenses, but usually, that is what makes the difference between $150 lens and $5000 lens. Also, it could be that your face is not in focus.

[@mce32]

@@ChandlerDavidSmith and yes, I am watching your videos in full HD =)

[@mce32]

The difference is not huge, but visible. It's hard to tell from the pictures, but still: prnt.sc/tq17a2 vs prnt.sc/tq17go

[@brandonvance9688]

So why did putting $15k into the property jumó it up $30k in value?

[@endrialbo]

after fixing the property, bank values the house at a higher price increasing the price of the property

[@HyettVision]

What no one mentions about the brrrr method is that once you refinance, your mortgage on that property will increase 100 dollars for every 10k you cash out refinance. Simply put, if you refinance and pull 80k out, your mortgage in that property will roughly go up 800 dollars rendering your profit on that property non existent, actually putting you in negative rental income per month.

[@ChandlerDavidSmith]

Not sure where you are getting your numbers. That math wouldn’t even work at a 10% interest-rate. With current interest-rate if you pull out 80 K it would be between $300 and $400 extra a month. If you’ve purchased your property correctly you should still be cash flow positive in a big way.

[@jordandiaz6267]

@@ChandlerDavidSmith can you provide a breakdown cost for your profit on renting the property at your 1% rule. What is your average monthly take home/profit on a single property where youre renting and implementing the brrrr method. Another thing to help me understand.. You're essentially borrowing money from equity to cash flow over to a new property while increasing the loan value but renting so tenants pay the mortgage, so that you can aguire more property /assets and repeat the process. Sorry that's a lot but just like to be clear.

[@tedbates1316]

How can you buy a house for $55K?

[@adrianespinal3294]

Can anyone please help with the course. I have never been able to actually view the course. Has anyone had this issue. Does anyone have a contact email for Chandler please.

[@ChandlerDavidSmith]

I’m so sorry you’re having issues! What you can try is going to the login screen for the course, plugging in your email and pushing “forgot password” and go through it again. If that doesn’t work, please email me at [e-mail] and I can help you get it figured out 👍

[@primorojo9481]

God bless

[@claytonmercer3923]

Are you planning to add a BRRRR calc to CDS Calc?

[@ChandlerDavidSmith]

One day!

[@carolynrobinson7274]

He he brrrr go skraa

[@kianaburden2226]

Anyone every told you that you have a nice voice

[@moibird1865]

“You don’t need any money” Step 1 & 2 , borrow money to buy and refinance*

[@francodalegre]

Why do we need to buy the house in cash?? we cant buy the house with a morgage??

[@francodalegre]

I want to say, I buy a $100k house with a morgage, I pay down 20%, what is $20k and then I will rehab the property and increase its value, I go to the bank and refinance the loan, I recovered my money. Obviously it is a very simple example

[@bingboong7639]

I know a few people who did it this way, the problem is after a few deals, your DTI will not let you refinance. Though there are ways around it.

[@francodalegre]

@@bingboong7639 Sorry, what is DTI???

[@bingboong7639]

@@francodalegre Debt to Income ratio

[@ccx842]

Ha Investment goes brrrr

[@gianthills]

There's not much to it. The problem is there is no creative financing.

[@henrycollins2478]

Weird. I just got really cold, and it’s 80 degrees outside. And I don’t have the virus? Brrrr

[@ChandlerDavidSmith]

😂😂😂

[@Neilhouse5]

This video: BRRRR is great, but you have to buy CASH! Recommended video: Never buy a property is CASH!