9 Replies

hello BP friends, I've been trying to do more research on the brrr strategy.  I'm still alittle confused on the acquisition part. Is the only way of obtaining the property either  hml or private money if you DO NOT have the funds avaliable? I thought I was reading small banks or portfolio lenders will lend? Will they lend even if the property is in ruff shape and will not meet conventional guide lines? Furthermore and this is  probably a stupid question but confused on what or how to determine what a small bank is?

I've been reading and listening to people who have 60 or more units and started with around 20k and are or are on the verge of retireing. Is this really reality? just really trying to figure this out.  I'm working 3 jobs and have 4 units. Rehabbing the fourth to rent. Just looking for an easier method of doing things. 

Thank you for and advice


If you don't have funds, HML, private, and seller financing are really your only options

You can retire off of multifamily, yes. 

Investors will lend if you can prove the deal. If the numbers work.

If the property is messed up, it could be more difficult to get a loan. In that case use Hard money.

@Ryan Keenan

I like to look at brrrr more as a concept than the literal meaning. The key to brrrr is adding value. That doesn't necessarily mean you have to buy home in rough condition (can be hard to get a loan) and fix it up. You could buy a fairly nice house (easy to get a regular loan on) that has a bad floor plan and fix that. You could buy a house that has a big unused attic or basement, that if finished could add value. You could convert some garage space into living space. You could turn a 2bd 1 bath into a 3/2. 

There are many ways to add value, the trick is adding enough value to be able to refi and pull out most or all of your cash investment, and still have a property that will cashflow. You are not stuck with hard money or private money loans, you just need to see where you can add value. Thinking outside the box will allow you to see opportunity where others do not.

Good luck, its a great strategy!

@Ryan Keenan , my question to you is: if you already have 4 units, WHY can't you borrow enough deposit against the equity you (should) have in them, to borrow normally for your next one/s?

If you don't have sufficient equity, then simply: you bought WRONG (ie. paid too much)!

@John Kesner wrote: "The key to brrrr is adding value". Additionally, I'll say it this way: "The key to brrrr is buying RIGHT (ie. paying 30%+ less than what it ALREADY should be worth)! Cheers...

makes sense guys thanks for your help. Need to work on buying smarter. My first house I really didn't have any idea how powerful real estate was. I just thought buying a 2 family and having someone pay most of my mortgage would be awesome. Lesson learned.

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@Ryan Keenan  

A small local bank that keeps their loans in-house are great for investors. Call a few and speak to their commercial lending dept.  these are banks that are typically located in a few counties in your area, for ex.  

an investor never wants to think this way but I'm going to say it.  If something should happen and you experience financial hardship, you have a person to go to and deal with at the bank.  Not a large bank where you're pushing buttons on the phone trying to get a human on the line and their headquarters are on the other side of the country. 

Small banks with in house loans are flexible and can offer investors a lot. My bank has no limits to the # of mortgages they'll give me. They look for a DTI ratio to be 1.3 but consider 1.25. They don't have different interest rates for their investment loans on a purchase and a refi. Typically a refi has a higher interest rate.

The relationship with your lender is priceless.  They might have a customer losing their home and give you a call to take it off their hands.  

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