The first B of the BRRRR

[Terry N.]

I've heard there are no dumb questions, but this might qualify. In order to launch a BRRRR empire, the first B has to be purchased outright, not leveraged, true? or untrue. I've been looking at this and feel like I'm playing Chinese chess. Thanks..

[Levi T.]

Ok this is how it works, and I'll use real time examples: This week I bought two properties, one for 65k that was appraised for 140k, and another for 85k that was appraised for 155k. I'll drop 20k into the first and 15k into the 2nd. I personally will rent both till I need more capital, then sell one or tap the equity as needed to buy more if I want.

Please note: I call it the two-step when you buy 2, sell 1, then buy 2 more. It's like BRRRR, but it lets you take some cash and debt off the table as your buying 2, taking a step back by selling 1, then buying two more with the cash off the sell of one of the 1st.

For example, I did a type of BRRRR recently, when I bought 7 properties, and used equity from other property like the ones above to pay the downpayment.

The key part a lot of people need keep in mind, is not to kill the golden goose by leveraging beyond your monthly cashflow with debt services + operation cost. To make the entire BRRRR process work, you going to have to be good at deal making, or your going to be waiting a long time for the value to grow.

Hope that helps!