How To Buy Rentals With No Money Out of Pocket
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The speaker explains how they have used the BRRRR method to purchase 197 rental properties without using any of their own money. They start by buying a property for $105,000 using a private money lender's money and putting $100 down. They then spend $35,000 on rehabbing the property, including adding luxury vinyl plank flooring, a new kitchen with granite countertops and a backsplash, and finishing the basement to add more living space. The property is then rented out for $1,495 per month to a good tenant after two weeks on the market.
The next step in the BRRRR method is to refinance the property, which the speaker emphasizes should only be done after the property is rented and fixed up. The speaker takes the property to a bank and has it appraised for $185,000, which allows them to receive a check for 80% of the appraised value, or $148,000. This is more than enough to pay back their initial private money lender, who they owed $140,000. The speaker paid the lender $6,000 in interest and was able to give them a check for $146,000 in about 100 days.
The speaker received a check for $148,000 from the bank after refinancing the property. They paid back their private money lender $146,000 and used the remaining $2,000 for closing costs and reserves. The mortgage is for 25 years at 3.75% interest, and the monthly payment is low enough to be covered by the $1,500 monthly rent. The speaker expects to cash flow positively after expenses and accrue $300 per month for future expenses.
The speaker emphasizes the importance of scaling the process by repeating the BRRRR method on multiple properties. They offer free resources, including a training and mentorship program, to help others learn and implement the BRRRR method. The speaker also discusses the importance of maintaining the exterior of the property and providing tenants with tools, such as a shed, to help them do so.
The speaker explains how they have used the BRRRR method to purchase 197 rental properties without u