Hi BP nation,
I am looking to learn how to BBRRR. Has anyone done this constantly with success? How would you analyze such a deal/s? Is building a Multifamily better? So many questions!
I am very familiar with the traditional Brrrr method. Have been searching for this methodology for a long time with little success. Since, home prices are so out of whack at the moment I would like to learn more about this strategy!
I did some of my own research and everyone talks about zoning and how zoning is everything. That is quite surprising. Still curious how to run the numbers and how to find the right resources to learn more about this.
Zoning is super important especially if you want to build multi family properties.
A method that I used was, I printed out a map of each town / area that I was interested in and combed through the town planning and zoning regulations making notes of the can dos and can’t dos in each zoning district and highlighted those areas on the map that fit my criteria.
I ultimately landed on a multi family zoned lot with 2 existing mobile homes with additions on them. I designed a 7 townhome development, demoed the existing structures and off to the races. We were about 50% framed when COVID hit. 😳 so the majority of the build was quite challenging but well well worth it to say the least! ABV ( after build value ) is double what I have invested less sweat equity. So 100% + return through the lens of investment to equity created.
In my opinion the upsides to new construction is that you know exactly what you’re getting, your maintenance, repairs & cap ex will be much lower for a longer time. The ability to create value through sweat equity, seeing opportunity where others don’t or don’t have the drive to go for.
The down side is length of time til you have a rentable property. Make sure you’re able to build what you want via confirmation from the town before you close on the property.
Hope this helps !
Have a great day!
@Jonathan St.Leger that is a great method, thank you for sharing!
I was wondering exavtly what docs/plans/etc did you have prepared to take with you to the city for their confirmation prior to closing on the property?
I always have the property surveyed directly after getting under contract as it can sometimes take awhile to get it back depending on their work load. With the survey in hand you can then create a proposed site plan which would generally include the following : Building size and location on the property, Septic area along with septic repair area ( unless you are able to tie into a sewage treatment plant), Parking, Building setbacks, Storm water retention area if applicable in your area, Lot coverage %, Fire Hydrant located within a acceptable distance for fire trucks to have access to, sometimes a landscaping plan and a lighting plan may be required.
This is a rough idea of things to consider that the town / city may require for multi family development, some of which may not be needed for single family development. I find it best to go talk with the planning / zoning department in the jurisdiction that your looking to build in and they are most always in my experience willing to help guide you in the right direction and provide you with a specific list of items that they require for a preliminary approval so you can have the confidence to know that you can build what you would like to on the property.
I hope this helps. Have a great day!
@Jonathan St.Leger absolute gold. This definitely helps a lot!