Buy Rentals With OUT Using Your Money!!
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The video discusses the BRRR method, which stands for Buy, Rehab, Rent, Refinance, and Repeat. The speaker explains how they have purchased $25 million worth of real estate in the last six years without using any of their own money. They attribute their success to the BRRR method, which involves buying a distressed property at a discount using someone else's money, such as a hard money lender or private money lender. After purchasing the property, the next step is to rehab it and make necessary repairs. Once the property is ready, it can be rented out to tenants. The next step is to refinance the property, which involves getting a new loan based on the property's current value. Finally, the investor can repeat the process by using the cash to buy another property and continue building their portfolio.
The speaker provides a real-life example of how to use the BRRR method to purchase a distressed property without using any of their own money. They use a private lender named Steve, who gives them $100,000 to purchase a distressed property for $100,000. The speaker then uses $50,000 of Steve's money to rehab the property and get it rent-ready, bringing the total investment to $150,000. The property is then rented out for $1,800, and the next step is to refinance the property to pay back Steve and get some cash out of the property.
The speaker emphasizes that the property must be both fixed up and rented before approaching the bank for an 80% cash-out refinance. The bank will send out a third-party appraiser to value the property in its current condition, and based on that value, the bank will give the investor a loan and cash for 80% of the property's value. The speaker provides an example of a property that appraised for $200,000, and the bank gave them a cashier's check for $160,000. The investor then used this money to pay off their initial lender and had $4,000 of tax-free money left over.
The speaker explains the financial benefits of using the BRRR method. They provide an example of a property that they purchased without using any of their own money and how they were able to make $4,000 of tax-free money. They also mention that the mortgage and all owning expenses are paid by the rent that comes in, and they have positive cash flow of about $300 a month. The speaker emphasizes that they were able to increase their net worth by $40,000 without using any of their own money, and they will continue to make tax-free money through depreciation. Over time, the property's value will increase, and the mortgage will be paid down, leading to further growth in equity and net worth.
The speaker introduces the modified version of the BRRR method, which includes an additional step called Scale. The Scale step is crucial for creating generational wealth and involves creating systems and processes around each step of the BRRR method. The speaker emphasizes the importance of personal accountability and accountability from wholesalers, rehab crews, and bankers. They also stress the need to increase lead flow and have extra funding lined up at the buy, rehab, and refinance stages. The speaker provides an example of how they have used this method to purchase $25 million worth of real estate without using any of their own money. They encourage viewers to subscribe to their channel and hit the notification bell to stay updated on their latest videos and live streams, where they share their knowledge and experience as both an investor and teacher.
The video discusses the BRRR method, which stands for Buy, Rehab, Rent, Refinance, and Repeat. The s