The “Infinite BRRRR Strategy” | $95k BRRRR Case Study

[@bn1011]

I just completed my very first brrr deal and it came out infinite with an extra 100k cash in pocket and it still cash flows $1500 a month. It's crazy. Still can't wrap my head around how amazing this system is.

[@bn1011]

540k purchase price, 80k reno & arv appraised 910k for those curious.

[@literalsarcasm8455]

Nice going! Would you mind giving some details like property type and what kind of financinv you utilized?

[@bn1011]

@@literalsarcasm8455 it was for a full duplex. Refinancing was quite simple - I put on a second mortgage (apparently I am allowed to have 3 mortgages on a property).

[@grapplerke]

@@bn1011 Which state? Sounds like California if you’re going from 540K to 910K. I think I should be going this route rather than moving into bigger houses to house hack. What rate did you get for your mortgage?

[@williamkreth]

Great work!

[@neepost2726]

DADU……Thank you for giving me a cool name for it. I found a property in Tx with a detached property and I thought…another rental piece. Now I’ve got DADU. Love it all!!!!

[@Xanthrochroid]

I’ll say this much, Tarl, you’ve got brass balls for taking on this project. In some jurisdictions, this house would have been condemned.

[@tarlyarber]

It's takes brass balls to win in this business

[@SethWilcock]

Tarl is such a master. I've learned so much valuable info from his videos over the years.

[@binadixon1820]

This was amazing. Thank you for taking the time to do these. I’m new in the industry and scared but excited. I’m in the education stage so this was great! Thanks again!

[@williesimmons5760]

Hay how are u doing.. Me tooo lets link and exchange 💡 ideas??

[@cn-yg6vf]

Its scary but not as bad after 1st deal, my 2nd deal fell through in the last minuteand im getting used to losing good deals; its a process

[@ektapatel1835]

I’m new to Real estate, still 2 deals done. Let’s connect if you want someone to share and build professional relationships

[@clideogle6317]

Loved hearing more about this brrrr method of investing.

[@JSRDesign23]

18:20 You are 100% correct on this. If you have Structural issues go to a Designer instead of a Contractor first. And always always go to a contractor that was referrred by someone wo actually did their home not the contractors you get in the Mailbox or billboards!!

[@zacharytbaird]

Great content, keep these style of videos coming! Could you guys make a video that focus more on renovation finishes and budgets for flip grade level and rental grade level?

[@tarlyarber]

That can be done!

[@daemontenicholson7894]

^^^^^This^^^^^^

[@MarioRuscovici]

the transformation of the inside is breathtaking!

[@chneckbone]

Great informative video. Loved the real world example with visuals. Also, very good to hear the info on foundations. I’ve had to pay for a foundation repair before and it seemed like a ripoff. $20k to drive two piers to support a chimney? Didn’t even consider getting a structural engineer. Thanks.

[@lavernbernard2708]

I love your videos Tarl. I am waiting to buy my first investment property

[@teamwebbtastic]

I just started. I have my third door also in Tacoma as well. Thanks for the help I’m looking for another deal now!

[@hughspringer3558]

Great stuff Tarl, thx. I passed on a $30k+ foundation repair in 2019/20...but I'm in the greater SEA area and pretty sure I'll need helicol piles to shore up the 6" settled foundation on a hill, and to stabiliize for future attic dormer addition STR adu. Havent hired a structural engineer yet, but would love to on BP pro forums to get more tips on local foundation or struc eng contractors to consider, based your exp. Thx!!

[@InvestAndGrow2020]

You guys need to talk about credit score it’s so important

[@andrewibarra5413]

Great video! Great Work! Love it! I would love to hear more about the financing side next time. Very informative!

[@tylermundy7985]

Great stuff! Good work - that crawlspace gave me some major anxiety. Cool to see how you brought in the right people to keep the rehab cost low.

[@MarioRuscovici]

i like the dadu as an extra exit strategy

[@InvestAndGrow2020]

And you need to talk about the hard money process step by step.

[@doraexplores]

SUCH good information!! Thank You 😊

[@ThanhTran-qq6xm]

Thank you for these type of info. Great video!

[@miniatureupcycler]

I like your background display "discipline equals freedom". I believe originated from Aristotle. How true that is...in anything we do.

[@Grannyknockers]

Just blows my mind that people will pay more for a 784 ft² house built in 1925 than they will for a 10 yr old 2800 ft² house here where I live. And that little thing looks like it's in a C/D class neighborhood

[@tarlyarber]

Crazy how different markets produce different results, huh?

[@Grannyknockers]

@@tarlyarber I didn't realize Seattle was locked in by water to the east. Makes sense if there's nowhere for the growth to go

[@tarlyarber]

@@Grannyknockers totally correct

[@Flipflopfinance]

This was amazing. Gréât vidéo!

[@netmaster88]

Very smart keeping it. I did this on my first property and I sold to get out of the monthly payment when I should have rented it out. Granted Covid but still. I should have tried to keep it. I would have doubled my profit easy. Now I'm trying to get back in with what I made and I'm like gaaaah so difficult to find am opportunity to grow that money

[@josephcacciapaglia4753]

This seems like a great deal, but I think you are overstating the cash flow. In addition to management, you should account for vacancy, maintenance, and capex. I realize that maintenance and capex are lower on full rehabs, but they're typically not zero. I think it's a great strategy, and this seems like awesome deal, so why not give them all the details. Even if this were a zero cash flow deal, after those allowances, it would still be a great total return. I'm sure you actually know all this, but I believe oversimplifying deals like this on video can confuse a lot of new investors, so it should be avoided.

[@djgainsbond]

Do you have a similar video breaking EVERYTHING down?

[@josephcacciapaglia4753]

@@djgainsbond I have one for STR, but not traditional rentals. It's just not what I'm doing at the moment.

[@djgainsbond]

@@josephcacciapaglia4753 I'd like to see still. I'm sure I can grab a nugget from it.

[@josephcacciapaglia4753]

@@djgainsbond kzbin.info/www/bejne/opaae6hsZ89pnac here it is. Please excuse the poor quality. My KZbin is just for fun.

[@williamkreth]

This was awesome! Loved the pics loved the math

[@ArtisticallyAspiring]

I’m so excited to obtain my first investment property. These videos are so helpful

[@mrj4nk1ns]

Amazing video good learning content

[@shanestelly]

Great breakdown

[@natusfreedom472]

Tarl , u should have your own KZbin channel .. great content . Thxs

[@JOMOPressureWash]

Good job with the continent bro!

[@nathanbrinker1149]

Yep the foundation was jacked up Literally XD

[@petervendetti2796]

Please talk about refinancing with a new tenant in the new renovation. The requirements?????? Before you get the 70% of equity in the new renovated property

[@69mcguire]

Great video! One of my rentals has a tree branches as rafters LMAO

[@amafid]

20:39 no pun intended.

[@timothyandersen1533]

Amazing video! Please go into your selection of finishes and appliances! Also Why carpets? You said saving money. But with cleaning and damage? Is that even true? So many questions haha

[@mawrmcmahan]

It's videos like this... where I learn nothing and everything is obvious... lets me know that this is the career for me. Thanks for demolishing my imposters syndrome. 👍👍👍

[@clearviewproducts]

Bro! No mention of the fix on the crawl space? An otherwise amazing video. Even if there are reasons not to show the fix, what went into fixing that crawl space?

[@PlayRoy001]

21:03

[@alexschauer8013]

Tarl's editor here. This is a link to a previous video we filmed that goes more in depth about inspecting crawlspaces. It doesn't go into full detail on fixes for the issues (the thought is to work with your contractors to figure that out since no two properties are the same), but the video is more comprehensive than what is shown here. kzbin.info/www/bejne/n2fHm4OOhdNqfck

[@Mg-ht8xb]

PLEASE tell me who on this earth refinances investment properties? 🙏

[@QuocTran-xz5mq]

Could you go over why you do not supply the refrigerator and W/D for the tenants?

[@tarlyarber]

This is Tarl. We do supply the refrigerator and W/D for tenants. You may have miss heard what I said. I said for flips we don't always supply the refrigerator and W/D

[@supern6va1]

Would love to see a deep dive just on the foundation fix process.

[@GergC0521]

@5:12 no mention of a lack of insulation in the wall?

[@RR-vp7ze]

@biggerpockets @Tarl Thanks for all the info. Tarl, who do you normally go through to do your refinances on your BRRRR projects? Any top lenders you suggest? Big banks/small banks etc?

[@RamaHealthBeauty]

Hi, do you have a link on material you bought for this project? Is anyone can help me ?

[@theshyinvestors3302]

Is there a show called "flip this house"? I'd watch that.

[@JakeRichardsong]

Very interesting....if you wanted to get multiple rental properties, isn't that what the BRRR is for?

[@clayvin83]

Did you originally get it under contract at the $95000 price or did you originally offer more to get it under contract and then came back after you got the costs for the foundation and negotiated a better price? Thanks very informational, just went under contract on a flip/brrr but it clearly has some foundation issues any advice is greatly appreciated!

[@mjlaramore]

Yes but how long did it take for you to get your refi money You have to rehab and then rent and then wait until the bank will allow you to refi. That’s a long time.

[@tarlyarber]

You of course need to finish the rehab and rent it out. That's the point of the BRRRR strategy and only way to increase the value of the property so that you can refi. As far as how long you have to wait, that all depends on you and your financing. Sometimes you only have to wait a day, sometimes 3 months, sometimes 6. All depends on your lender.

[@muscle949]

Why take a bigger loan which would make payments higher and more to pay back in the end?

[@tarlyarber]

To get the cash out that you invested into the deal. All depends on your strategy and financials and purpose for the property. Everyone has different opinions on this. At the end of the day, it's your investment so do what you think is best for you

[@muscle949]

@@tarlyarber wouldn't it also be better to pay the rental off as fast as possible? If your finances allow ofcourse.

[@vindrock8176]

I always do BRRRR with 2 family homes. I working with my BRRRR nr 6 and 7.

[@dman378]

$350 won’t pay for most people’s monthly Starbucks. Have you ever considered the year on year returns on flips?

[@shelleygreyrealtor]

Cash flow is only the tip of the iceberg...especially when doing a brrrr.

[@dman378]

Good inflation and rising prices with tax write offs make it ideal. Problem with this sort of leveraging is when prices drop. A trendy argument is you keep collecting the rent but not always. In 2009 rents on several units I owned dropped over 30%. Good strategy but with current prices not as safe as it seems.

[@tarlyarber]

You're missing that this house has a ton of equity in it after we were done. I have flipped over 600 houses, trust me, I do consider the benefit of flipping vs keeping. There are MANY reasons to keep vs sell, research and learn and grow, you will one day understand....I wish I learned a lot sooner.

[@sharlinehill509]

Hi Brandon this is sharline the new kid on the block ready to learn and buy properties and invest.thank you for everything endless blessings

[@austinleady9500]

Being 21 my goal well first is make my first move on my first house but future goal is to do 3 house flips then keep every 4th.

[@michaellee7525]

Hi when keeping the higher end finishes the same between the flips and the BRRRR, do you do the same for the flooring? How do you decided whether to use LVP or Hardwood? Or do they not change the appraisal value as much?

[@rcruz401]

Great video! What is the max Debt to income ratio to qualify on a cash out refi?

[@theitalianguysfoodtour4940]

Hi guys what do you think about buying a mobile home in a park and renting it out yes I'm looking to get into rentals with low money. What are my pros n cons thanks phil

[@marcovieira1071]

How many brrrr deals can you manage per month?

[@osricharris9625]

Did you guys use private/hard money loan to purchase the property?

[@tarlyarber]

Yes

[@noytheya]

How come you never discuss the seasoning requirements most banks impose?

[@tarlyarber]

Because we go over so much already. And also, not all lenders require seasoning. Also, rate refi's require zero seasoning. Many many different lenders out there with different requirements these days.

[@joeywharton5662]

I'm on the fence on selling a rental that was my primary so I can still sell it tax exempt. It's on a 2.25% VA loan. My net cash flow is $2300 for two units on the property. City zoning would allow me to build another unit- even a tiny house. I've done a top to bottom rehab. Bought it for 200k in 2018. It's comping at 800-850k today. Do I sell and build out more STR units on other properties I own, or hold and build out another unit on this property?

[@danielhargraves2680]

Why do you have a portrait of Brandon Turner behind you? 😂

[@Ziggydavy]

Was this a MLS deal ?

[@tarlyarber]

No. Off market

[@Ziggydavy]

Direct to seller ? Wholesaler ?

[@RobertBierma]

Not a fan of the remodel. Vinyl over wood is just a sin in my eyes. One reason this made a profit a good profit and that's the acquisition price.

[@onetakejake2562]

I take it Samoans we’re staying here lol

[@thewall4669]

If I’m projecting a cash flow $350 a month on a purchase, I’ll just wait for a better deal.

[@tarlyarber]

You're missing the almost $100k in equity...on top of the $350 cash flow....

[@thewall4669]

@@tarlyarber For this particular property and specific area, yes the 100k in equity can’t be passed up. But in my region, I’d be wasting my time on a $350/month cash flow in which you will never get 100k in equity. Maybe 30-40k. My average cash flow is $540/month per property. I just know what works for me and my area.

[@tarlyarber]

@@thewall4669 exactly. If I was in your market, I'd probably be investing the same. Know your market. Good thing there are many markets and it's important to know what a good deal is vs not in that particular market. In Seattle/Tacoma appreciation is very common, cash flow is not.

[@angelo-001]

How did I know the garage was going to house a human 🙄

[@youtubecarspottersguide1]

how do you quilfy for more than one loan??

[@stevenroshni1228]

Sounds like a commercial loan. The bank will look at the rents to see that they will get their money.

[@InvestAndGrow2020]

2 year of rental income on your taxes

[@youtubecarspottersguide1]

@@InvestAndGrow2020 so on the BRRRR IM looking at it might be vacant ? I still have to Quify for the loan and the loan on my. current rentals liv in one rent the others

[@stoneray76]

You didn't show the basement after repairs.

[@PlayRoy001]

21:03

[@stoneray76]

@@PlayRoy001 thank you but is that fully finished it looks half finished

[@matthiasbowie3844]

This.

[@mcagrinds28]

❤

[@MaxxG]

They went through all the troubles for $350 month cash flow smh.

[@grapplerke]

You’re ignoring the equity appreciation and tax writeoffs. You are somewhat right though. I wouldn’t touch this property; I’d rather make a 500K property into a 1M one.

[@MaxxG]

@@grapplerke I agree. If I am going to invest my time and money, I rather go fry a bigger fish... Opportunity cost

[@tarlyarber]

"all that work" is relative based on your business and skill set. I had about 6 hours of my time into this project personally....so yes...$350/m cash flow plus the huge equity and no money into the deal, and adding this into my portfolio...totally worth my time. Learn and Grow, one day I hope your business works for you too.

[@tarlyarber]

PS, this is Tarl

[@MaxxG]

@Daniel if you only put 6 hours of your time, where did you put the project management cost? In rehab cost?