BRRRR Method | BRRRR Property Investing UK Strategy Explained | How To Apply In 2021 Step By Step
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- เผยแพร่เมื่อ 29 ก.ค. 2024
- The BRRRR property investing strategy in 2021, is much talked about. The BRRRR stratregy underpins what successful property investors have done to achieve property investing success. BRRRR is a great strategy but it needs to be tweaked to market conditions. This video explains how to apply the BRRRR method in the UK in 2021.
00:00 - Introduction
03:30 - BUY
05:38 - REFURBISH
16:50 - RENT
17:47 - REFINANCE
24:12 - REPEAT
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Ranjan, you missed a crucial point in your video. I can easily do a double back extension or RSJ fitting etc. In less than 6 months with a good fast tram. I can get the property ready to rent in 6 months. Spending only 10% on minor changes will only be worth it if you get a property 30% BMV.. which is very rare. I believe your video is good but theres a few shortcomings. Thanks
You probably dont care at all but does anyone know a method to log back into an instagram account?
I somehow lost the account password. I would appreciate any tips you can offer me.
Probably one of your best videos! Nice one.
35-40% BMV is really hard to come by with how much competition there is now! It seems everyone is trying to do it
Commercial?
Awesome, watched the entire thing and it all made sense :) Bravo
Such a helpful video, explained super well. Thank you for taking the time to throughly go through this. I’m new to property investing is this is exactly what I’m working on, great tips
Great video...the best I have seen so far on BRRRR
Brilliant video Ranjan, very useful and some great advice. Thanks
Brilliant video explaining the whole strategy and the market in 2021. I’m currently 18 and looking to use this strategy next April/may time.
This is exactly what I want to start doing! Only in the stock market at the moment! But thank you for all the insights in this video!
As always great video
Probably the clearest explanation on the different market value I've seen
These videos are fantastic.
Good stuff...love the RSJ graphic in Random place 😉
Excellent video, very informative!! Thank you
Absolutely amazing video Ranjan thank you!
Nice one Ranjan! Really interesting... Just need to take the bold step.
It’s great that you come off the fence and give an opinion. The discussion at 15 minutes is golden.
Thank you. BTW: I've never been one for sitting on the fence. All you get is a sore backside 😀
LOVE THIS
Great video love the content, keep it up 👍
Fantastic video! This is so helpful as someone who wants to get into BTL property as a first-timer.
Great video, clear explanation. Thank you!
Thank you Ver, do get in touch with Akhil from Our Mortgage Broker to discuss and advise you when you wish.
All the best.
Tel: 0203 971 1234
Email: akhil@ourmortgagebroker.co.uk
what a channel priceless info ❤
Thanks for the information is very helpful and gain great knowledge
Wow brilliant advice
Thank you Ranjan. Great video with lots of contents.
Thank you Sam. Do get in touch if you have any mortgage relating questions
All the best.
Akhil Mair
Tel: 0203 971 1234
Email: akhil@ourmortgagebroker.co.uk
Best time to do a BRRRR is now and about to do one in west london part of the country. Great video and well explained and very simple language
Hoping to get started in property when I'm 18 in 2021🔥 Deflation soon come!
I like this vid. Good insight.
Great video!
Great video. I like all the details. However, it really would be good to see a video on how one can find sellers motivated enough to offer a 35 below market value discount. I've been looking for my next property for a while, and there is so much competition out there from other investors getting anything more than 10 percent seems impossible. Would really be great if you could do a video to address this point.
Hi Ranjan, another very incisive, informative, intelligent, impressive, important and personally for me both insightful and inspirational. It was another Awesome Baker Street Property Meetup Yesterday Evening.
I did exactly the same thing in the early part when I started back in 2013 and it worked well. Will be interesting to see now when In March if the property prices dip a tad to get that uplift later on by creating that value and when the market recovers.
Awesome performance
amazing!!
Thank you 👏👏
Bruhh good nuggets
Well done Ranjan a very detailed and informative videos. I am so proud being one of your mentees on the early days now enjoying my Freedom Lifestyle with the passive income from property investing.
Thank you Jamie. Do get in touch if you have any mortgage relating questions.
Akhil Mair
1 second ago
Thank you Nassim. Do get in touch so i can take you through bridging options, fees and terms in more detail.
All the best.
Akhil Mair
Tel: 0203 971 1234
Email: akhil@ourmortgagebroker.co.uk
Yet again another informative video from Ranjan.
I started on the property joutney in 2018 with this startegy and happy to continue with this since I do have built up a very good power team. My focus is in the midlands area Uni students lets. I do buy 2 to 3 bed properties and transform them to a 5 to 6 bed en-suit (HMO) to a high spec under PD and rent them. Unfortunately the cost will be over 10% of the property value. I can pull out the development costs but not all the money. As you said I do achieve a RoI of 23%-27% by letting. In my portfolio I have 3 properties now! I do repete the process and help my friends to do this. If anyone intrested and need help I can do so. Thanks for your magic videos Ranjan......
hi , i am interested in this strategy taking onto consideration i have a bit of saving. i am abet scared from taking my first step especially that i want to do bridging and i am wondering if you can help me understand the process of applying after you find BMV house. many thanks . NAZ
Loved this video, I’ve only got one, time to refinance and get No2. Thank you
This is veryyyyy good
Yes I am doing a refurb now with the brrrr system in mind but adding and extension,+1 bedroom to maximise rental
By far the best video ever made on the Brrrr Strategy Fact
Brrr the winner but 35-40% Bmv in current climate, is this realistically achievable ?
It will be with motivated sellers as they will always exist but will it really be like a Tsunami of people’s circumstances changing and needing to sell their homes quick ?
The knight in shining armour then offers them 35-40 % Bmv the asking, they accept. The knights a good dude really as he has helped someone to move on with their life and it cost .. Closure
Listened to quite a lot of your content Ranjan and this was by far the best so far... keep up the great work
Michael
Great work👍! Any ideas for the minimum size of bedrooms if would like to get rid of the living room?
Very good video for upcoming landlords but you’ve missed one huge point in refinance. Unless your a cash buyer most people will buy it on a mortgage usually on a fixed rated and if they refinance they will incur early repayment charge. Some lenders do a further advance up to new value of property after so many months.
Not if you buy it through bridging
Sick bruu
Great video Ranjan, my main worry with doing this is that everything seems to be selling rich at the moment and I worry I won't be able to get the valuation I need to recycle my capital.
Listen to Ranjan he is the man.
He knows what he's talking about, he been doing it for so many years, so subscribe and give him the thumbs up.
Well done ranjan
Thanks
Hassan
This all sounds ideal and many trainers advise getting discounts. What I have experienced recently is that sellers get offers above asking price and I cannot get the properties I made offers on even at the asking price.... I find it quite frustrating as many predicted the market will crash in November. And yet, it is nowhere close to crashing. Furlough can be further extended beyond March and there might not be a price crash for months now....
Hi Diana,
Remain optimistic and persistent.... Its a tough market but with great opportunities.
Get to know the local agents and property sources, let them know exactly what you are looking for, your ceiling purchase price and share with them your proof of funds and DIP (which I can arrange), this will give you a better chance of finding properties before they even hit the market.
All the best.
Akhil Mair
Tel: 0203 971 1234
Email: akhil@ourmortgagebroker.co.uk
Yes I agree,it’s really hard to find property 35% or even 25 % bmv because I’d competion
Curb - a check or restraint on something. Kerb - a stone edge to a pavement or raise path
Does anyone recall an advert for getting a refund on stamp duty due a loan all contracted? I am short by £50 ,000 but after watching your fab videos, have learnt soooo much. Thank you
one of the most valuable videos i have ever watched . thank you very much for that Ranjan . could you please do a video about purchase property through bridging company
Thank you Nassim. Do get in touch so i can take you through bridging options, fees and terms in more detail.
All the best.
Akhil Mair
Tel: 0203 971 1234
Email: akhil@ourmortgagebroker.co.uk
Thank you very much Akhil I will be in touch soon .
Many thanks.
Nassim
Great video but can you explain the refinance side of this method in more detail I.e. time limitations from banks to remortgage since ownership and other ways of generating finance in order to do carry out BRRR with little money yourself? How to finance to buy refurb as well how how to refinance the property at ANY time since ownership
I’ve seen many videos on this strategy but this one was really detailed and really gave a good perspective on things. It makes a lot of sense not to refinance yourself up to the hilt unless you have to. 10 properties sounds like a good place to drop that ‘r’. Thank you Ranjan, great content as always
Hi Ranjan, I'm a big fan, could you point a direction to A4-C3 change of use, or is it completely impossible, thx!
Can you do a video how to find bmv properties and how to work out how much bmv they are
Ranjan, in London this strategy does not work. Property sold fast and you can not purchase 30-40BMV. Maybe 1 in 1000. It could take you years to find one.
U r right. Very difficult in London. Firstly to get necessary bmv, but also London yields are low which make refinance at 75% Ltv, difficult
So when buying a property via mortgage , should I opt for a short term mortgage , is it possible to refinance with a fixed 5 year mortgage?
Can you use a repayment or buy to let mortgage to buy the property in the first place?
and when you get a capital increase in value a year or 2 down the line you can pull the rest of your money out
Ranjan, I have just started my project on property this year. Just wondering which area should I be buying, should it be somewhere near where I live or just pick somewhere cheap ?
Hi R, whats your approach when your overseas?
Bread and butter housing breakfast thankyou
And how do we find 35-40% BMV? In South England or London getting these discounts are next to impossible and you have done well if you buy 5-10% BMV, and up North areas can be low value where it can lead to false economy and longer to rent (low value areas are likely to find homeowners thanks to the govt schemes). Also, bridging is not cheap. Yes there will be distressed assets but we need to be realistic.
Is it the end of property as investment and consider more liquid and easier assets like stocks? Look at the S&P 500 it speaks for itself
I can’t find 15% BMV and I have been looking for 2 years.
All these videos on buy refurbish rent out and refinance all sounds great but what are you telling the banks about how your going to repay the mortgage?
Where i live just outside london property sells for above market value even if it needs renovating so its impossible to do now in my area.
How many months is good until you pull all your money out? Found a house with good cash flow but it would take 90 months to pull out the original £30k of investment. Is 90 months too long? If so what should I be aiming for? Thanks
How do you do this without having cash. In my area a 3 bedroom house will cost around £250000 to £300000. They roughly rent at around £950 to £1000 pcm. The rent won't cover the mortgage. I can only think you can do this on flats costing £100k ish.
Great video however in the current climate 35-40% is just not realistic to achieve! Specially not in London but thanks for the video. Would be helpful if you could do a video for property investors based in London as it's a completely different game. thanks
As mentioned in the video, with residential property you are right, it is very difficult today. Watch this video for how to apply BRRRR in a heated property market th-cam.com/video/TleFo9nZqQQ/w-d-xo.html
@@ranjanbhattacharya-succeed7617 Thanks
Hello uncle, I just bought my first property and currently on my second property using this strategy. Thank you for all the information and has helped alot. I'm 21 years old and want to get into property. Only problem I have is tax. Any tip on maxing profit.
Great to hear from you. Would love to know more about your first deal.
Please checkout my property tax video checklist th-cam.com/play/PL2qbo6eRT_4pBkUJAYPApu1B8qrMSSqLR.html
What about the cost of paying the mortgage back early??? The 3 % or whatever
I’ve seen a lot of property’s run down but they are all going to auctions and I’ve heard auctions want a lot of money up front is this true or not the case?
How realistic is it for a non professional property developer to find BMV these days? Or better to wait for 2022 when the market hopefully potentially cools?
Hi Ranjan, i am about to purchase a house to BRRRR this is my first time, should i put this in a limited company or in my own name i am not a high tax payer but would be if i purchase a second BRRRR.
thanks
Thanks Ranjan for the energetic video as always! One question - when you change strategy from BRRRR to BRRR (no refinance) - is the Buy being done with a BTL mortgage (assume 75% LTV) - if so what happens to your ROI calculation as surely you are leaving much more money in the deal? And doesn't this prevent you from Repeating?
Cracking question, which deserves a video answer. A sort of BRRR part two! Will upload shortly.
@@ranjanbhattacharya-succeed7617 Maybe a hybrid IO mortgage with overpayments - the best of both worlds as drives down principle and allows you to both pivot as necessary and wont appear on your affordable calculations as optional.
Been doing this to build my property portfolio however in the current market I think it is too high risk. Think you will be buying high (current inflated prices due to exempt SDLT), delayed or slower refurbishment due to Covid (additional build, opportunity cost) and likely selling at low prices come 2021 due to the anticipated economic downturn due to mortgage down valuation and SDLT exemption ends in March 2021. Too high risk for my money for now.
Hey man. He didn’t say to do it now. He said to do it in 2021 lol. Also if you do it in a ltd company your downside is capped in theory. Do you think they’ll extend the stamp holiday?
Great video Ranjan! One question - would it be a viable strategy to use a BTL mortgage as a means to finance the property rather than bridging finance. I.e Complete the refurb, add value, rent and wait 12 months until you refinance on to a new BTL mortgage. Allowing you to essentially complete one deal per year without the hefty costs of bridging loans?
All depends on whether lender has early redemption penalty. And even the ones that don’t, wouldn’t want you doing it more than a few times
@@ranjanbhattacharya-succeed7617 Thanks Ranjan, makes complete sense considering BTL Mortgage is for long term finance. Thanks again for your quick response and keep up the fantastic content!
Finding deals like that are not so easy from my research! Also the brrrr strategy is good for cash flow but the end result has to be the good fortune of capital appreciation, without that the asset could be worthless. I know it's unlikely after 20 year mortgage to have no capital appreciation but it's a very tricky situation. I'm still willing to take a calculated gamble in this strategy for the cashflow aspect alone. What happened in the late 70s is not impossible to repeat. The current affairs worldwide will most definitely affect the world economy and the hope is it's not at the level of the late 70s. High loan values and high interest rates spell disaster for most.
Don't agree. The commercial to residential deals I have done this year ALL follow this model. For more info www.succeedinproperty.com/free-training
You are the Don who has extensive experience and knowledge in this sector so I can't say you're wrong. It's just logical to be apprehensive in these uncertain times. I still will try this strategy as I previously stated. Thank you for your insight and reply.
One more comment: you've mixed up two things: you start by talking about ceiling values in a given street and then you say our aim here is actually to maximise RENTAL returns and concede - quite rightly - that these are two very different objectives. So why mention the first? By the way, this idea of maximising rental value alone is very dangerous, as you can spend a lot of money eg turning a nice 3-bed house into a 5-bed HMO to maximise its yield, only to find that you've then got a definite ceiling on the value of the property (as you can only sell it to investors at 10x the annual net yield tops) and you can't sell it to a family for a profit without spending a load more converting it back into a family home. I see novice investors coming a- cropper many times over this, because they've followed this strategy. Please be FAR more cautious in how you dole out advice.
Thanks for the word of caution... have seen the BR-oops-I-can’t-refinance method go badly wrong (not that I’m saying you can’t win by brrr... of course you can).
Hi Ranjan, when is best time to get mortgage survey for remortgage. Is it when work is completed or when you actually have a tenant in place (proving the rental income)
Hi Stephen,
The mortgage survey can be arranged once the refurb works have carried out, the property is in a lettable and mortgageable condition.
You do not necessary have to get the property tenanted to apply for a remortgage capital raise mortgage.
The surveyor will give their market opinion on the rental figure and share this on the report with the lender.
All the best.
Akhil Mair
Tel: 0203 971 1234
Email: akhil@ourmortgagebroker.co.uk
@@ourmortgagebroker Do we need to take a bridge loan before refinancing? How much does it cost?
When renting would you be looking to rent the properties as a HMO or not?
Check out this video on HMO pitfalls th-cam.com/video/xjO3pMEZwCo/w-d-xo.html
Can someone please explain, after you pull all your money out including deposit and renovation costs when re-financing, you have no equity left in the property? How can you still own the property when you no longer have any money in it at all? Is there a type of mortgage you can have where it doesnt require any deposit or something? Please help
Robert Price: You do not physically pull all your money out - you take out a loan (larger than the first loan you used to buy it with) in order to buy your next one. You still own the first one as you have a (large) mortgage on it. Hope that makes sense 🤔
What happens if the house prices crash when you come to re financ it
Good question. I guessed you are stuck since the formula works on basis that either the max valuation unchanged or higher after you finish adding value!
You wait. However this is tricky if you are using investor finance so you should always have an alternative way to pay back your investor if you cannot refiance immediately
I did refinance in the middle of COVID and managed to pull out all the cost spent on the uplift. Since the RoI for Rental is in the region of 23% - 27% over a period of time the money could be recovered. This is a riskey business and not a get rich quick game.
How does one find out the market value of a given property in its current condition?
Ajit Nair: You were not listening ! He said you find the true value of a property in the close surrounding area by looking at comparables, i.e. find properties in a like-for-like condition.
@@joline2730 thanks 🙏🏽 for listening 👂
How do you avoid the 6 month rule.
it's not exactly a rule anymore there are lenders who let you refinance straight away.....kent reliance is one of them
Thank you for your video its really helpful, forgive me in new after you get your 10 properties you say on the 11th don't re finance so are you saying on the 11th you use that money to start paying off the mortgages on the others as you rightly said you will need to pay those mortgages back are you using the 11th propeety to do that or are you expecting to just sell them to pay them back later? Many thanks x
By not refinancing post refurbishment, you will be leaving a little money in the deal, but you will make more cash flow from it. This extra cash-flow helps replenish your pot so that when you do your next deal you still have required seed capital. But the advantage here is that over time, you continue to grow but your LTV across your portfolio decreases. The end game is not to pay off investment property loans, just to have your LTV's down at a manageable rate so you can withstand any market shocks (which tend to sink the over leveraged)
RANJAN....WHY NOT ADD!! L/O...2 your Equation??
Absolutely. Check out th-cam.com/video/qDU46cjvan4/w-d-xo.html
Ranjan, question for you:
I bought a freehold block of flats this year.
Its an old chappel which was converted into 4 flats.
I paid 255k for the building. Each flat rented for 450pm. The building and each flat was really run down, so i have refurbished. I now acheive 600pm rent on each flat. Total refurb cost will be 25k.
I didnt buy the building with the hope to do BRRRR, but now that i have refurbished, im wondering how much value have i actually added. As its freehold flats its hard to compare to anything in the area, to get a ceiling price. Am i likely to have added substantial value?
Or because its a block of flats am i likely not to see much capital growth?
bruh method
Good video, but you do need to say that there's no such thing really as buying below market value unless your mum's doing you a favour. You can buy a property at a "good price", because e.g. the seller's in a hurry and you've got cash to do it up, but so will other buyers, and so the price will be bid up (or down) to its market value in the given circumstances. The only times when properties are bought at below MV is when there's corruption or nepotism involved. So I do wish people would stop using that term, because novice investors often find themselves losing money because they think they've bought something at BMV when they haven't - there was just a risk premium built into the price for a reason, and this was accurately reflected in the market price they paid.
Sorry but not true. My entire property career has been buying below market value and had taught/helped hundreds of people do the same.
@@ranjanbhattacharya-succeed7617 No, you haven't been buying at below market value. You've been buying AT market value given the circumstances. E.g. I bought a house at auction for 131k and after renovating it I sold it for 275k this year. However, I did NOT buy it for BMV - many buyers were competing with me on auction day and it went for its true market value in the purest sense of the term, ie. many buyers competing in a free market armed with the same knowledge. The reason it was cheap was because the buyer was taking a huge risk by buying it after viewing it for just 20 minutes, with possible structural damage and with zero guarantees plus all the risks of the renovations ahead. But I'm sure you would have called that buying at BMV, which shows to me that you do not understand the basic principles of economics in a free capitalist society. Please give me ONE example of when you bought at below MV! Just ONE.
@@adielstephenson2929 and what's your portfolio like??
Hi Ranjan, I have been following you for almost 15 Years. You are always very helpful and informative however your videos are unnecessary long. If you can please edit these, make these between 10 to 15 min max it will be very helpful Otherwise I am afraid people will stop watching such long videos
Click the gear icon and watch at double speed. (Will be doing more shorter videos too.)
@@ranjanbhattacharya-succeed7617 LOL, exactly. People are so ungrateful
@@ranjanbhattacharya-succeed7617 I think keep the videos as they are. If people are really dedicated and interested they will always watch them to the end 👍🏻
@@jackhorrey5962 Agree if people really interested to learn they don’t mind listening right through to the end. Still better off than attending 3 days in a workshop just learning one single property strategy.
I consider myself probably an average investor. I do watch the whole videos and sometimes more than once especially this one. There are nearly always you learn something new when you watch it for the second time . Thank you Ranjan, your free videos are sometimes more valuable than some of the paid webinars people offer.
Unintentional comedy when you write on the screen! All intelligent people have terrible writing.
Hey. I wish I had teachers who though like you back at school !!!😀
Sorry, more incorrect statements here: "if a property has never sold in that street for more than eg 250k pounds, that IS the ceiling price." WRONG. I was told the ceiling price in the street I just sold a property for 275 for was 245. Had I listened to the agents, or just looked at sold prices in that street I'd have left 30k in profit on the table. You can set a precedent in a particular street, and in fact I've done this several times. We were listening to this sort of thing 8 years ago - your concepts are out of date.
Adiel Stephenson: YES!! I have followed many many properties bought and sold on certain streets and Yes, this is highly achievable. One house was bought for £75,000, improved but may I say not to a fantastic standard, then sold for £200k. I find that a lot of people under-sell, not really knowing what a house can fetch. setting new ceilings is VERY achievable - well done !! 🙂🏠
Ranjan do you consider it’s achievable to BRRR within London Zone 2? Or demand is too high in central ish London areas and prices simply get inflated, including auction properties..?
The *Buy, Refurb* bit works fine in anywhere including London.
the *Rent* bit is more challenging in London because rental yields are very low in London compared to other parts of the country.
When Refinancing in London, you may find the lower rental yield restricts your LTV in London, which will mean that you won't be able to pull out as much of your cash from the deal which affects your ability to *Repeat*