$40 Million in Rentals Started With THIS One Real Estate Investment
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Sam shares his experience of buying his first property using the BRRRR method without using any of his own money. He acknowledges that there is a disconnect between his experience of owning 300 properties and someone who is trying to buy their first property. Therefore, he wants to go back and share his experience of buying his first 10 properties, starting with his very first one.
Sam explains the BRRRR method, which stands for buy, rehab, rent, refinance, and scale. He used this method to buy $40 million worth of real estate without using any of his own money. He bought a distressed property for $77,000 with a private money lender and borrowed $97,000 to buy and fix up the rental property. After fixing it up, he rented it out for $1,250 to a tenant who stayed for three years.
To get his private lender's money back with interest, Sam learned about the refinance step from his mentor, Brian. Brian suggested that Sam take his fixed-up rental property if he had equity in it. Sam explains how he used the BRRRR method to fund his first property. He refinanced the property with a small local bank and received a check for 80% of the appraised value, which he used to pay off his private lender.
Sam shares his experience of buying his first property using the BRRRR method and what he learned from it. He explains that he used to put offers on properties without a formula, but he now uses the max allowable offer formula, which is ARV times 75 minus repairs. He also learned that municipalities can be a challenge, and it's important to develop a relationship with inspectors and fix exactly what they say. Sam coined the term "passive wealth trifecta," which refers to the equity, cash flow, and property value appreciation that can be achieved through rental properties.
Sam shares his experience of buying his first property using the BRRRR method without using any of h