All Forum Posts by: Andrew Angerer

@Tim Herman This is strictly a theoretical example for helping people understand the BRRR method.

New people, 

If any of you are having problems understanding the BRRRR method, I found this super simple explanation for it. It has helped me out a ton, hopefully it helps you too.

Please explain like I'm stupid (because I am): How does the BRRRR strategy help you pull money out when you refinance? : realestateinvesting

Insert what ever numbers you feel like

You buy a home for $100,000; You put down $20,000, meaning you mortgage $80,000.

You do repairs at a cost of $20,000; Home is now worth $160,000

You have put $40,000 into the property, worth $160,000; You rent it out, once it has income, you can refinance the property at somewhere near 80% loan to value, which 80% of $160,000 is $128,000

You owe $80,000 on a home worth $160,000, so you have equity of $80,000. Pull out the difference between $80,000 and $128,000 (80% of home value), or $48,000.

Congrats, you now have your $40,000 back, $8,000 profit, and a property that’s paying you.

It really is a true gold mine of free, honest advice for real estate. I think the biggest part of bigger pockets is how much they push whole life style changes, which really can make a person go from being lazy and depressed to focused driven and confident.

I was introduced to real estate investing by the rich dad poor dad company, but was dissuaded by their for profit workings. It was by chance I found bigger pockets and I knew I found home, because of the many reasons you have listed above. There is such a great culture on this website, and the fact that it is all free amazes me, I am glad to see someone else appreciating it as well !

Find Brandon Sturgill, who has a profile on bigger pockets. His company Hypothetical Insight, has a great website and really knows the C-bus area really well. 

It probably has become slightly less important, but typically is still a major factor when getting money from the bank. I recently got a line of credit and that was one of the few questions I was asked. 

Banks and credit unions really just want to know that you are bankable, so if you have low W2 income, you better have a good credit score or visa versa. If you have neither, there still are ways that you can find funding for real estate investing. This usually would be other people's money, who don't have the time to invest and want to find someone who will do it for them. Keep in mind they want someone who they can trust, and probably has some experience in real estate investments. 

What is your goal, cashflow or fix and flip?

 What specifics are you looking into in order to increase your cash flow?

Unless you have a ton of cash sitting around, this seems like one of the best ideas to go with. Best of luck with your future plans!

Best,

Andrew

What is your biggest roadblock right now in real estate investing?

What are you doing to overcome it right now?

Just trying to get a convo started, have a good weekend everyone.

The report looks good to me, let me know how everything works out.