I watched my dad do this over many years. The longer you own the properties the rents will increase, and the hundred per unit example will gradually increase. The example of earning $100,000 a year will in time turn into much more. It’s very important to commit to the PROCESS and stop looking for get rich quick short cuts. Bottom line is you have realize anything of value will take time, effort and commitment.
1. How do you have the down payment for such exponential buying per year? 2. Hard money loan sounds easy, but with the low cap rate now, how do you find good deals so easily to support the buying pattern you illustrated and still be profitable? 3. How do you find a team that supports this process and still be profitable? Remember when your unit count is low, you can't afford the property management and eventually you are just finding yourself a new job. This can't be done when you have a full time job. I find many of these information are good in theory but hard to implementation. Especially if you live in a areas that doesn't support a good rent return.
@@PS-rb5fw agreed. I think the biggest issue is making sure you have LOTS of reserve cash for maintenance issues that pop up. 100 units @ $100 seems like there is a huge zone of error should multiple units have maintenance issues.
@@Surfscoolin I am assuming cash reserves are accounted for in $100 return in his example above. Cash flows = Rental income - Operational/Maintenance Cost - Finance Cost - Reserves For multi-units, the reserves would depend on the state/age/usage of the property.
You think? I'm in upstate NY. Lousy with Fart-Mart jobs. I don't even know if I can house hack my house! I can't live with pple yet I could rent out 5 rooms in my house! But one kitchen. I can't even find a property mgr to help me start. My plan is to rent out the rooms to my house, which does not have a mortgage & buy a duplex or a triplex. Just a plan any way.
@@tannerfatta3724 But how are we accruing enough wealth to move to step 2,3. Even if a duplex was 200k, 10 % downpayment is 20k. 100 bucks a month would take you 200 years to save up 40k. He was saying you'd do this after 1-2 years. so where are we getting the other 19k from? Is he assuming that the value went up so he can do a cash out refi?
@@Metalsupremacist if you are going to only cash flow 100 a month. Stay the fuck away from that property 😂. And fha loans allow you to put only 3.5% down.
Great stuff. Very informative. I would say ... jump from 4 to 50 and from 50 to 200. Is more fun like that. Once you hit 50 and your friends see your success ... JV with them on 200. They bring the money, you bring the know-how.
Are banks going to give you this many loans? I already have 1 multifamily ready to buy my 2nd. How many loans can you get from the bank before using other methods to finance all of these deals?
I find for myself there is a learning curve going from 1-4 to >4 properties espcially when it comes to financing and having enough capital. The capital needed seems to be very limiting early on.
People talk alot about private money like its every where on demand? Yes its easy if you have a great deal. Or mommy and Daddy. Might be able to take a chance? But its not always that simple when your just starting out .Most people want to see a positive track record. a long with experience.Before they invest with or loan you money.
I understand BRRRR. To a point. But you said you aim to have $100 cash flow per unit. That makes sense too. But when you refinance your expenses go up. So yes you get cash out but you lose some or all of your cash flow. So what’s the point? You’d end up with 100 units but only half of them cash flow because of the refinancing. Am I missing something?
Generally, rents go up at the same rate as expenses. You are correct, but lets say instead of refinancing, you sell the property and use your equity (1031 exchange is also an option) to buy other cashflowing properties. You arent necessarily forced into ownership of a negative cashflowing properties and refinancing is only one exit opportunity option.
Lol You didnt understand. Nobody buy house that cashflow 100 he Said After putting some money to side. Its just exempel Lol l own 25 Doors and l make 500$ from each Never buy house that cashflow 100$after expenses
@@osmanxxrngxx1369 yeah thats because you own only 25 doors at some point when you have like like 50 or more you’ll have to hire a property manager and you’ll need to pay them properly.
If you house hack, like a duplex on owner occupied financing with minimum percent down, the cash out refi for your next down payment rarely works. You got in to the house with minimum down (likely 3-5%); if you’ve then moved out and the property is considered a rental now, most conventional lenders will only loan 70% LTV on non primary residence cash out refi. So even if you rehabbed it and/or has high market appreciation, to immediately get 40-50% equity gain is unlikely.
Good strategy Brandon. One of my real estate mentors said to me, looking after 1 unit is the same effort as looking after 100. Buy as many units as you can afford. What are your thoughts on that?
How are doubling the amount of properties every year? Are you leveraging the value of the previous houses to purchase more units? Good video. I am going to buy your book.
Pay off bad debt like credit cards. Cut back on your expenses. Ask a relative if you can borrow some money for a down payment in a performing asset. Then with the money that the home generates pay that plus what you save back to your relative. But do it in good faith. Trust the system, it’s easier than you think. Think outside of the box. Just get creative! How bad do you want your freedom?
That's the part they don't tell you. If you place these loans in your name and not in an LLC, you expose yourself to personal liability. And you can't get a conventional loan with good rates if you have an LLC on the mortgage. Typically you need a high down payment. And if you BRRR, you need hard money. In order to pull this off, you need to have a good chuck of cash to start off with and BRRR your first property and make solid connections because you're going to need to tap into that.
Once you get past 4 units it's no longer residential, 20-30% down on these properties is huge.. not many have 100-300k laying around. That has to be the biggest step imo. Not being able to rely solely on yourself and the bank to get your foot in the door on a purchase.
You need money to buy property!!! I bought a property 20% down plus closing 44k.... that’s just one family res. How and the hell do you save another 44k for more properties
You don't need to put 20% down. You'll get hit with PMI but if you increase the value of the property (or when it goes up in a few years) you cash refi.
Dude how about sharing how you finance buying the stack. Cashflow and appreciation doesnt happen that fast. Are you using commercial lending and is there something speacial i'm missing?
Correy Wilson Consistency over a long period. It may be a matter of keeping your full time job and using rental profits to finance additional properties.
1. Live way below your mean 2. Save at least 50% of what you net 3. Save enough to start with first and buy at the right time 4. Refinance to use the appreciated equity 5. Stay consistent and don’t give up It will take time
Do some cost comparisons for things like paint. If you pay a painter in my area it can be as much as $1500 to paint a few rooms. If you have a renter move in live there one year their kids mark the wall. Congratulations you made no money for the entire year just to repaint the home to make it rentable to a new tenant. You must know your numbers. 10% ROI minimum or it's not worth the risk.
Yeah in Georgia someone would paint the entire house I'm talking five bedroom living room dining room basement the only thing wouldn't be included in that price would probably be the garage
AustinAirCo Guess you never heard of a Security Deposit or Non refundable move in fee. These things cover minor damages such as that & if a painter is charging $1500 to do a few rooms, it's likely for a mini mansion & not an apartment. Otherwise, you're making up numbers.
Are banks going to give you this many loans? I already have 1 multifamily ready to buy my 2nd. How many loans can you get from the bank before using other methods to finance all of these deals?
@@thestrappingentrepreneur2822 Are you free yet? This is a prison planet the elite print paper tissue money and we kill for them with our time and sweats
guys someone help how should i get that much from bank i could mby barely get money for buying some not that worth house/apartment from mby bank no way they would give me for 3-4-5 houses
I'm confused. It seems straight forward but it's much more complicated then that. If you or I borrow 20% from a lender/friend/loan shark to have the down payment needed for the property, and you're only making $100.00 profit, the math doesn't make sense. It would take decades to pay the loan off. What am I missing? Seeking to understand.
B. M Aleman from what I understand he’s talking about just cash flow for the $100 (not including principal) so if your mortgage was 900 for a single family home and you were charging 1000. A good amount of that 900 would be going towards the house to pay off the loan and you just keep an extra 100 for yourself.
HOUSE OF CARDS. What happens when you factor in vacancy rate? What happens if interest rates go up? What happens when the market goes down? What ammount of rent are you collecting total to get your $200-$300 a month profit? If those ratios are to high then your profit could be gobbled up by vacancy rates alone.. I could go on forever. ALL YOU CARE ABOUT IS SELLING BOOKS, WEBINARS, AND COURSES.
The places in my city where you're getting a duplex or more are either millions of dollars or very old and in the ghetto. So you'll be making a lot of repairs and just be praying that your renter actually pays this month.
I’m curious because how do you do this stack method when every time you make a purchase of real estate it affects your DTI also you can only get so many loans
First off, you can not keep buying single family houses even if you have multiple LLCs there needs to be a person tied to the property. Also private investors can’t get into a property with unqualified people so they should care about who they are lending their money too.
Buddy! So cool to see this stuff, I don’t really promote myself or my portfolio just seems weird for me to put myself out there…So cool to see you doing this, appears to be may be one of your first videos? I’m wondering at 95 properties Four years prior how many doors you currently own, in a four year timeline - from 95 to?
Thanks for sharing. A very basic question, probably many beginners like to ask too, how can we get there from one property to the second one. I am at this stage and, I am kind of stuck on getting a new loan to fund my second one.
Banks hate giving out commercial property loans, that's why they make its so hard to get. Consider other options first - hard money, private money, rich one-off investors, etc etc. You can always refinance with a bank later for long-term loans. At that point, the bank looks at the property, and not you. How do you find those money sources? get into the "business" and get into the circles of brokers and banks, real estate lawyers and accountants etc etc. The rich investors are in those circles, cuz they need to find deals as much as you want to find them. Rich people CANNOT leave their money in the bank. Cash does not move, they need it to go into investments so it earns interest and gets "velocity."
@@jeffalex HELOC from what I understand would loaning your money to yourself so if you needed just a little extra to finish rehab it’d be a great choice but when looking at the aspect of acquiring property my opinion a cash out is better because you won’t have to pay on it along with other expenses hope it helps
Seems to n m e the concern would be if the housing market crashed all your units could go upside down and the market could get flooded with rent houses causing rents to go down This means you can’t make the mortgage and can’t sell cause you’re upside Seems like a very likely scenario I don’t know what he suggests for a down payment but it seems you need around 35-40% to be safe It is definitely a good plan in so much as even if you break even for a while you will eventually raise rent well above mortgage while gaining equity on the long term
Little disappointed. Was actually hoping to learn some actual financial mechanisms in the scaling process. Not just a guy saying "scale up" 10 times over. Sorry, but this video was not at all helpful.
So I’m not the only one confused about how to get loans. Can someone please be specific about what lenders to look for?! I’ve bought 4 properties and I can still using conventional loan on my last one, but I know I’m not able to get my next one because of DTI. How do you manage to still make profit out of the rental property if your hard money loan is at 10%+ interest?! Please give simple examples using numbers... anyone?? Please and thank you!!!!!!
hey brandon, loved your videos. i am curious that how do you manage your property, do you have a property manager to manage your all the property? do you have an LLC? Is all the property in one LLc or how many LLC you got for 95 units? Thanks
Dang, I don't know if I'd take anything under 250$, I'm still "building" my initial portfolio so having 1-5 paying 500 cash flow 1 thing goes wrong = months of net income gone right?
not really 100 units isn't 100 single family houses, it can be his appartment complex (40 doors) + some du/tri/quaplex + sfh. I know plenty of local investors who have 10-30 rentals - most have ~10 and fix/flip on the side to make at least 3-5k passive and fix/flip.
Financial Investor if you can get $500 cashflow After expenses you put your repair fund cut away, you have cracked the code. Keep doing what you're doing, that is a great position to be in. Get yourself to 20 of those pay em down quick you'll be sitting pretty
YES BUT HOW do you get all the down payments for each of those? A 10 unit in my area is $1,000,000. So I just need to save up $250,000? I guess I'll get working on that ...
to get this straight.... you can buy a house/apartment with a "small" down payment, take some dept, pay that dept with your earnings from your apartment, have it managed and still get out of it with 100+ a month, without having payed all the dept? seems kinda insane to me. so am I getting this shit straight? Jesus ....gotta invest into mmmmurrica
Hey! I love the videos, I’m a real estate agent, I’ve been doing this about 7 years and do some property management as well, I’m finally looking to acquire some long term rentals and wanting to scale quick, love the idea of the brrrr model BUT how do you get over the Debt to income ratio problem once you obtain a couple mortgages…?? I’m making pretty good money but I can probably only qualify for Maby 2 of these mortgages along with my primarily residence then my debt to income ratio will be maxed out.. or should buy 2 properties now, max out the DTI then wait 2 years so you can have 2 years of claiming the rental income on you’re taxes so the lender can use the rental income to lower you’re DTI so you can qualify for another 1-2 mortgages? Am I missing something here…?
You can wait the 2 years or roll the dice with higher interest and go through a hard money lender or private lender higher rates but typically don’t look at DTI and if it’s a good deal should be able to pay them back easily on a BRRRR
I wait the two years. Then every two years my income looks much larger. So in two years from now I can qualify for say two or three purchases. I think the thing a lot of these investors don’t tell us is that they’re probably partnered in a lot of their deals.
Hey Brandon! Reading your book right now. When you purchase multi units homes are you able to get them individually metered? Or do you do that as part of your rehab? Thank you!!! Love the BP Books!
Just get a multi unit, and pay off the mortgage quickly so you can keep most of the rents as profits and you'll be making way more than a couple hundred dollars a month.
you have to come up with tremendous downpayment plus u r tax returns has to show enough income and stability to get approved for loans for these properties. Are u not making this sound too simplistic ?
If you are doing conventional, yes, you're right. But I think all these guys use hard or private money, small down payments, partnerships, master lease, etc. If you buy a small good priced complex with conventional 20% down you should definitely be able to cash flow more than $100/$200 per unit...
@@marcduchamp5512 That's why it is important check credit, take deposit and last month's rent....Qualification is key! Also, in Florida(before the PLANdemic and pretty soon again), you could remove a non payer in less than 2 weeks after missing a single monthly payment.
How do you handle getting more than 2 houses if you have vacancies? How do you get a down payment for each new house? Are Yup out saying you sold one house and bought a bigger multiunit house? For example year 1 one unit, year 2 two units, year 3 four unit single house, year 4 you have a 8 unit building? Or are we talking about multiple separate buildings?
I make 21$/hr at my job at the moment, i have a credit score of 740, and i have about 16k$ in equity at the moment. It is possible to do this for me? What should be the price range in the 1st house I buy? or the second and third? and 1 more question: should you buy a house that's ready to rent day 1? or one that needs work? or a forclosure?
I'm in a similar situation as you. What I'm currently doing is looking for cheap move in ready duplex that needs a bit of work but isn't terrible. I will live in the uglier unit and rent out the good one. Or, if you don't mind living with people, get a single family and rent out the rooms. I don't want to share a kitchen/bathroom with other people so I'm going for the multifamily properties. I'm only going to put 5% down or less if allowed. Over time I will do renovations as I can afford. Once I got the property all fixed up, I'll sell it for a profit. I'll then take that money and repeat what I just did until I have a good chunk of change to start doing BRRRR's. I'm thinking $75 -100K is a good starting number. By then I should have enough experience to start being able to get partners and investors to work with me on future deals. Once I have $75-100k saved up, I should be able to do some cash deals and just bypass the banks all together. You can only get so far with the banks before they cut you off. Going to be slow going starting up but it will snowball eventually.
how can i afford a 60 unit propety after 7 years? how tf am i gonna get that downpayment using the "stack"?? the downpayment on a 60 unit is huge, how tf am i gonna get that down payment
I haven’t purchased my first property yet on account of student loans but I have been doing a lot of research. Look at net domestic migration. Basically which states are people bailing and leaving and which have the greatest influx of people. Then you can look at things in the state like popularion growth of cities, crime maps, schools, average annual income increase, average rent increase etc. Some states make it difficult to evict somebody too and are not landlord friendly. Some people even try to find out if there are a lot of building permits getting approved too because it means the area is growing. Personally I would avoid California but that’ll be easy because I don’t live there.
If you syndicate 100 units with 100 investors, all you have is the cash flow of your share, 1 unit. If you want the cash flow of 100 units, you have to create value equal to the equity of 100 units, or put in the downpayment for 100 units. Either way, no easy task. Stacking is not the challenge.
Doesn't work like that. In syndication you get enough cash from investors to secure a down payment you own the bulk of the property and get the equity pay down. You pay the investors the dividend and take what's left over. You agree with the investors what is fair in terms of dividends and return on capital that's the deal making part. And alot of that depends who your investors are.
Brandon, you seriously need to find $100 in your financial empire and invest in a lavalier microphone. The echo is horrible. You are talking from inside a tin can. Thanks for the info though, always good stuff.
Not usually. Most standard banks have limits on what they lend investors. I.e here in canada my bank gives me a limit of 500,000 in RE investment loans, or 5 seperate mortgages. You can tap out on banks pretty easily early in the game. You will need private banks and finance companies to fund the mortgages on your commercial properties usually after that. The hardest part of real estate is coming to conclusion that you will 100% definitely need JV partnerships if you want to scale, it is unavoidable. If you are not an outgoing person it will be tough to build relationships with people who will be willing to lend you hundreds of thousands of dollars for down payments. @@thestrappingentrepreneur2822
Chase is good at multi family lending. If your situation isn't as clean, other smaller banks are good. We have a 1.76M loan with a smaller bank on our building
If you're not netting 10% minimum from the home in cash flow you will fail. How do you make 10% ROI. The numbers tell you, if you don't know your numbers you will never make it. You must make the home nice. If renters move in and move out every year you will never hit 10% ROI because you will always be spending money on make readies. It has to be worth your effort 100 - 200 month per property forget about it. Apartment complexes are not for beginners. KISS. If you have any doubts about what I am saying research the financial crisis of 2007-2008. If you only make 10% ROI after all expenses you also have appreciation which could net you 13-15% per year or more if price appreciation jumps.
great video but the capital needed for a single family and a 32 unit complex is obviously completely different.. how are you going to get the capital to purchase a 32 unit complex in 7 years? yes, i understand you may save the cash flow from previous properties but my question still applies to those properties as well.. not much cash is needed for a single family all the way to a 4plex but once you start looking into bigger properties that’s when things take a real jump. love the video though, put things into perspective but still trying to wrap my head around how someone is gonna go from buying a single family home for let’s say 100k, to buying a 32 unit complex for 10 million in 7 years
@@ryanthepianoman27 loan types are different. it’s easier to get approved for a 700,000 dollar 4plex compared to a 32 unit, 5-10 million dollar complex. i understand that all you need to do is create your real estate portfolio, have great cash flow history, and a good financial statement to show the banks but still. there’s different levels to this. same concept but different levels. especially if you wanna accomplish this in 7 years. better get used to asking people for money.
I have 5 units + i house hack. Wasnt easy. You need a good w2. Find owner finance deals (found 3 units this way). Use other people's money who believe in you - capital is hard to come by.
I watched my dad do this over many years. The longer you own the properties the rents will increase, and the hundred per unit example will gradually increase. The example of earning $100,000 a year will in time turn into much more. It’s very important to commit to the PROCESS and stop looking for get rich quick short cuts. Bottom line is you have realize anything of value will take time, effort and commitment.
I feel like we're missing a step here. Oh yes financing.
Buy 4 houses then tear them down to build a hotel. From 4 units to 100 units like the monopoly man 🧐
The bank isnt going to be happy you torn down thr property and insurance company ?
I never thought of just buying mor houses
🤣🤣🤣🤷🏾♂️🤷🏾♂️🤷🏾♂️
1. How do you have the down payment for such exponential buying per year?
2. Hard money loan sounds easy, but with the low cap rate now, how do you find good deals so easily to support the buying pattern you illustrated and still be profitable?
3. How do you find a team that supports this process and still be profitable? Remember when your unit count is low, you can't afford the property management and eventually you are just finding yourself a new job. This can't be done when you have a full time job.
I find many of these information are good in theory but hard to implementation. Especially if you live in a areas that doesn't support a good rent return.
mysimon2003 he’s not looking for the greatest deals ever 100 per unit after all expenses isn’t hard to find
@@PS-rb5fw agreed. I think the biggest issue is making sure you have LOTS of reserve cash for maintenance issues that pop up. 100 units @ $100 seems like there is a huge zone of error should multiple units have maintenance issues.
@@Surfscoolin I am assuming cash reserves are accounted for in $100 return in his example above.
Cash flows = Rental income - Operational/Maintenance Cost - Finance Cost - Reserves
For multi-units, the reserves would depend on the state/age/usage of the property.
@@aryanv thank you for clarifying that! I've read more in the last 6 months. So. Much. To. Learn.
You think? I'm in upstate NY. Lousy with Fart-Mart jobs. I don't even know if I can house hack my house! I can't live with pple yet I could rent out 5 rooms in my house! But one kitchen. I can't even find a property mgr to help me start. My plan is to rent out the rooms to my house, which does not have a mortgage & buy a duplex or a triplex. Just a plan any way.
But how are we going to arrange downpayment for 100 units in 7 years?
Cash flow will build up from the previous properties
@@tannerfatta3724 But how are we accruing enough wealth to move to step 2,3. Even if a duplex was 200k, 10 % downpayment is 20k. 100 bucks a month would take you 200 years to save up 40k. He was saying you'd do this after 1-2 years. so where are we getting the other 19k from? Is he assuming that the value went up so he can do a cash out refi?
@@Metalsupremacist if you are going to only cash flow 100 a month. Stay the fuck away from that property 😂. And fha loans allow you to put only 3.5% down.
@@tannerfatta3724Haha basically don't listen to what this guy's saying then haha. The video talks about 100 per unit being his Target.
@@tannerfatta3724 wow your rich
Great stuff. Very informative. I would say ... jump from 4 to 50 and from 50 to 200. Is more fun like that. Once you hit 50 and your friends see your success ... JV with them on 200. They bring the money, you bring the know-how.
Are banks going to give you this many loans? I already have 1 multifamily ready to buy my 2nd. How many loans can you get from the bank before using other methods to finance all of these deals?
B Muss 😂 they must be giving houses for free
B Muss it’s based on your debt to income percentage. Most banks won’t give you a loan if your debt to income percentage is more than 45%
Yeah but then do you split the cash flow with them or do you pay them back + some %?
I find for myself there is a learning curve going from 1-4 to >4 properties espcially when it comes to financing and having enough capital. The capital needed seems to be very limiting early on.
People talk alot about private money like its every where on demand? Yes its easy if you have a great deal. Or mommy and Daddy. Might be able to take a chance? But its not always that simple when your just starting out .Most people want to see a positive track record. a long with experience.Before they invest with or loan you money.
If you put your mind to it, anything is possible. Thank you, BT.
I understand BRRRR. To a point. But you said you aim to have $100 cash flow per unit. That makes sense too. But when you refinance your expenses go up. So yes you get cash out but you lose some or all of your cash flow. So what’s the point? You’d end up with 100 units but only half of them cash flow because of the refinancing. Am I missing something?
Generally, rents go up at the same rate as expenses. You are correct, but lets say instead of refinancing, you sell the property and use your equity (1031 exchange is also an option) to buy other cashflowing properties. You arent necessarily forced into ownership of a negative cashflowing properties and refinancing is only one exit opportunity option.
Lol You didnt understand. Nobody buy house that cashflow 100 he Said After putting some money to side. Its just exempel Lol l own 25 Doors and l make 500$ from each Never buy house that cashflow 100$after expenses
@@osmanxxrngxx1369 yeah thats because you own only 25 doors at some point when you have like like 50 or more you’ll have to hire a property manager and you’ll need to pay them properly.
@@osmanxxrngxx1369 hype!!
@@osmanxxrngxx1369 25 doors?????
If you house hack, like a duplex on owner occupied financing with minimum percent down, the cash out refi for your next down payment rarely works. You got in to the house with minimum down (likely 3-5%); if you’ve then moved out and the property is considered a rental now, most conventional lenders will only loan 70% LTV on non primary residence cash out refi. So even if you rehabbed it and/or has high market appreciation, to immediately get 40-50% equity gain is unlikely.
Your rich!
This is the biggest issue we are having. We are having a lot of issues scaling. Financing and scarcity of labor are our two biggest challenges.
How is it progressing?
Good strategy Brandon. One of my real estate mentors said to me, looking after 1 unit is the same effort as looking after 100. Buy as many units as you can afford. What are your thoughts on that?
Double + 1 is my goal for every year after the first year
How do you get to qualify for so many loans? It's so hard to qualify for a loan...now 10 100 is even way harder
How are doubling the amount of properties every year? Are you leveraging the value of the previous houses to purchase more units? Good video. I am going to buy your book.
People, your numbers must work for each property, listed to more podcasts. If the numbers don't work, none of this works.
Very unrealistic to double each year.
@@PortlandPsychedelicSociety it isn't
Very inspiring. I'd like to hear how you were able to finance each transaction. Refi cash pullout, borrow from friends and family, investors, etc.?
Good question.
Puthy Pan well he bought some knee pads and um 😮🍆 💦
He'll never tell u
He’s selling the mentor materials and books l, lectures etc, not really sure if he’s really into real estate buying but the hype is alluring
Yeah but how do you get 2 home loans a year at the beginning?
Pay off bad debt like credit cards. Cut back on your expenses. Ask a relative if you can borrow some money for a down payment in a performing asset. Then with the money that the home generates pay that plus what you save back to your relative. But do it in good faith. Trust the system, it’s easier than you think. Think outside of the box. Just get creative! How bad do you want your freedom?
BRRRR
That's the part they don't tell you. If you place these loans in your name and not in an LLC, you expose yourself to personal liability. And you can't get a conventional loan with good rates if you have an LLC on the mortgage. Typically you need a high down payment. And if you BRRR, you need hard money. In order to pull this off, you need to have a good chuck of cash to start off with and BRRR your first property and make solid connections because you're going to need to tap into that.
Get one home at a time and pull the HELOC from the first one to use as DP on Second one but I'm just gonna jump into a 16 unit commercial property
im sure the first and second are hard. But its a snowball effect after that. I'm waiting patiently on my first lol
Once you get past 4 units it's no longer residential, 20-30% down on these properties is huge.. not many have 100-300k laying around. That has to be the biggest step imo. Not being able to rely solely on yourself and the bank to get your foot in the door on a purchase.
The key is commercial Multi family realestate not annoying houses
You need money to buy property!!! I bought a property 20% down plus closing 44k.... that’s just one family res. How and the hell do you save another 44k for more properties
Same thinking lol.
You don't need to put 20% down. You'll get hit with PMI but if you increase the value of the property (or when it goes up in a few years) you cash refi.
Appreciate it Brandon and the whole BiggerPockets team!
Its easy to demonstrate in theory. But how to get the finance to buy multi-units each & every year.
What about financing? How did you finance 4,6,10 units?
Dude how about sharing how you finance buying the stack. Cashflow and appreciation doesnt happen that fast. Are you using commercial lending and is there something speacial i'm missing?
Ok, well whats next? How do you fund these deals?
Find an investor #asap
Correy Wilson Consistency over a long period. It may be a matter of keeping your full time job and using rental profits to finance additional properties.
1. Live way below your mean
2. Save at least 50% of what you net
3. Save enough to start with first and buy at the right time
4. Refinance to use the appreciated equity
5. Stay consistent and don’t give up
It will take time
Do some cost comparisons for things like paint. If you pay a painter in my area it can be as much as $1500 to paint a few rooms. If you have a renter move in live there one year their kids mark the wall. Congratulations you made no money for the entire year just to repaint the home to make it rentable to a new tenant. You must know your numbers. 10% ROI minimum or it's not worth the risk.
He includes repairs in his calculations, so the 100 is after everything.
If you're paying 1500.00 to paint a few rooms, let me know the next time you need some paint work done.
If kids mark up a wall... buy a 2 dollar magic eraser. Whoever cleans the unit can scrub the wall for a couple minutes.
Yeah in Georgia someone would paint the entire house I'm talking five bedroom living room dining room basement the only thing wouldn't be included in that price would probably be the garage
AustinAirCo Guess you never heard of a Security Deposit or Non refundable move in fee. These things cover minor damages such as that & if a painter is charging $1500 to do a few rooms, it's likely for a mini mansion & not an apartment. Otherwise, you're making up numbers.
Are banks going to give you this many loans? I already have 1 multifamily ready to buy my 2nd. How many loans can you get from the bank before using other methods to finance all of these deals?
Depends on the state of your finances/ net worth. As long you have a good amount of equity you should be ok.
Your rich now
i think everyone understands growth, what i dont understand is how are you saving up 30k-100k a year to use as down payments every year
I live in my car and save enough. How bad do you want it? I'm willing to die for my freedom.
@@thestrappingentrepreneur2822 Are you free yet? This is a prison planet the elite print paper tissue money and we kill for them with our time and sweats
@@marcduchamp5512 how come he didn’t respond to you yet?
guys someone help how should i get that much from bank i could mby barely get money for buying some not that worth house/apartment from mby bank no way they would give me for 3-4-5 houses
I'm confused. It seems straight forward but it's much more complicated then that. If you or I borrow 20% from a lender/friend/loan shark to have the down payment needed for the property, and you're only making $100.00 profit, the math doesn't make sense. It would take decades to pay the loan off. What am I missing? Seeking to understand.
B. M Aleman from what I understand he’s talking about just cash flow for the $100 (not including principal) so if your mortgage was 900 for a single family home and you were charging 1000. A good amount of that 900 would be going towards the house to pay off the loan and you just keep an extra 100 for yourself.
HOUSE OF CARDS.
What happens when you factor in vacancy rate? What happens if interest rates go up? What happens when the market goes down? What ammount of rent are you collecting total to get your $200-$300 a month profit? If those ratios are to high then your profit could be gobbled up by vacancy rates alone.. I could go on forever.
ALL YOU CARE ABOUT IS SELLING BOOKS, WEBINARS, AND COURSES.
The places in my city where you're getting a duplex or more are either millions of dollars or very old and in the ghetto. So you'll be making a lot of repairs and just be praying that your renter actually pays this month.
buy somewhere else
@@kcbrutality5271 I have considered that. But I don't have that kind of experience right now. So maybe next time.
*Am really happy for being part of bigger pockets ,cause he help my life by making me a millionaire now✔️*
Uncle G's advice is getting to you? Great vid, will be on the webinar tomorrow. Thanks for all that you do.
Tou Fang Axdzs
Doing a presentation over your book multifamily millionaire tomorrow! Great stuff
how do you buy multiple properties in a short time period without it affect your credit?
If I’m a full time employee with no time, is real estate syndication better ?
I’m curious because how do you do this stack method when every time you make a purchase of real estate it affects your DTI also you can only get so many loans
Jergon 27 multiple business entities
Private investors don’t care about DTI. If the business deal makes sense and the numbers are accurate you’re good.
First off, you can not keep buying single family houses even if you have multiple LLCs there needs to be a person tied to the property. Also private investors can’t get into a property with unqualified people so they should care about who they are lending their money too.
Jergon 27 Your D.T.I only matter if you use conventional loans.
Utilize your private investors
I’m so excited to get started
This is great content to start thinking different way.
Buddy! So cool to see this stuff, I don’t really promote myself or my portfolio just seems weird for me to put myself out there…So cool to see you doing this, appears to be may be one of your first videos? I’m wondering at 95 properties Four years prior how many doors you currently own, in a four year timeline - from 95 to?
I can hear you now 2/27/2020
Thanks for sharing. A very basic question, probably many beginners like to ask too, how can we get there from one property to the second one. I am at this stage and, I am kind of stuck on getting a new loan to fund my second one.
If you get an answer let me know. I'm on two right now trying to get a third soon
Refinance. Take the cash out. Done. Repeat.
Banks hate giving out commercial property loans, that's why they make its so hard to get. Consider other options first - hard money, private money, rich one-off investors, etc etc. You can always refinance with a bank later for long-term loans. At that point, the bank looks at the property, and not you. How do you find those money sources? get into the "business" and get into the circles of brokers and banks, real estate lawyers and accountants etc etc. The rich investors are in those circles, cuz they need to find deals as much as you want to find them. Rich people CANNOT leave their money in the bank. Cash does not move, they need it to go into investments so it earns interest and gets "velocity."
@@Brian-cb3ce why cash out refinance over heloc? i looked it up. and still not sure
@@jeffalex HELOC from what I understand would loaning your money to yourself so if you needed just a little extra to finish rehab it’d be a great choice but when looking at the aspect of acquiring property my opinion a cash out is better because you won’t have to pay on it along with other expenses hope it helps
Seems to n m e the concern would be if the housing market crashed all your units could go upside down and the market could get flooded with rent houses causing rents to go down
This means you can’t make the mortgage and can’t sell cause you’re upside
Seems like a very likely scenario
I don’t know what he suggests for a down payment but it seems you need around 35-40% to be safe
It is definitely a good plan in so much as even if you break even for a while you will eventually raise rent well above mortgage while gaining equity on the long term
Little disappointed. Was actually hoping to learn some actual financial mechanisms in the scaling process. Not just a guy saying "scale up" 10 times over. Sorry, but this video was not at all helpful.
And where are you going to find qhat you need?
where do you get down payment for all this? And in 2022 with high princes how do you cash flow
So I’m not the only one confused about how to get loans. Can someone please be specific about what lenders to look for?! I’ve bought 4 properties and I can still using conventional loan on my last one, but I know I’m not able to get my next one because of DTI. How do you manage to still make profit out of the rental property if your hard money loan is at 10%+ interest?! Please give simple examples using numbers... anyone?? Please and thank you!!!!!!
All I know is that smaller banks tend to be better.
hey brandon, loved your videos. i am curious that how do you manage your property, do you have a property manager to manage your all the property? do you have an LLC? Is all the property in one LLc or how many LLC you got for 95 units?
Thanks
Dang, I don't know if I'd take anything under 250$, I'm still "building" my initial portfolio so having 1-5 paying 500 cash flow 1 thing goes wrong = months of net income gone right?
Financial Investor good luck getting money for 100 units 😂
He’s full of shit
Nathan Nichols it's all about who you know and your track record
not really 100 units isn't 100 single family houses, it can be his appartment complex (40 doors) + some du/tri/quaplex + sfh. I know plenty of local investors who have 10-30 rentals - most have ~10 and fix/flip on the side to make at least 3-5k passive and fix/flip.
Right, relationships are the key
Financial Investor if you can get $500 cashflow After expenses you put your repair fund cut away, you have cracked the code. Keep doing what you're doing, that is a great position to be in. Get yourself to 20 of those pay em down quick you'll be sitting pretty
YES BUT HOW do you get all the down payments for each of those? A 10 unit in my area is $1,000,000. So I just need to save up $250,000? I guess I'll get working on that ...
Smart better to start than wish.
to get this straight.... you can buy a house/apartment with a "small" down payment, take some dept, pay that dept with your earnings from your apartment, have it managed and still get out of it with 100+ a month, without having payed all the dept? seems kinda insane to me. so am I getting this shit straight? Jesus ....gotta invest into mmmmurrica
How many of those 100 units per LLC?
Haha imagine each $800 LLC in California will eat you alive
Yeah. I found out it's a million in assets per LLC. I believe.
random question, have you ever heard of anyone buying an entire real estate portfolio? how does that work?
There r companies that do that
How would you strategically use $500,000 cash to get started?
I'm looking to diversify my cryptocurrency wealth.
The big 100 club
Hey! I love the videos, I’m a real estate agent, I’ve been doing this about 7 years and do some property management as well, I’m finally looking to acquire some long term rentals and wanting to scale quick, love the idea of the brrrr model BUT how do you get over the Debt to income ratio problem once you obtain a couple mortgages…?? I’m making pretty good money but I can probably only qualify for Maby 2 of these mortgages along with my primarily residence then my debt to income ratio will be maxed out..
or should buy 2 properties now, max out the DTI then wait 2 years so you can have 2 years of claiming the rental income on you’re taxes so the lender can use the rental income to lower you’re DTI so you can qualify for another 1-2 mortgages? Am I missing something here…?
You can wait the 2 years or roll the dice with higher interest and go through a hard money lender or private lender higher rates but typically don’t look at DTI and if it’s a good deal should be able to pay them back easily on a BRRRR
After two years of rental income on your taxes, lenders are able to count that income to offset your dti
I wait the two years. Then every two years my income looks much larger. So in two years from now I can qualify for say two or three purchases. I think the thing a lot of these investors don’t tell us is that they’re probably partnered in a lot of their deals.
Again another pointless video. No explanation on how to do the “stack”. Unless your rich af and can buy 10 houses, there’s no way to do it.
Loan
I make between $300-$380 for each of my single family homes.
Hey Brandon! Reading your book right now. When you purchase multi units homes are you able to get them individually metered? Or do you do that as part of your rehab? Thank you!!! Love the BP Books!
Just get a multi unit, and pay off the mortgage quickly so you can keep most of the rents as profits and you'll be making way more than a couple hundred dollars a month.
like the chicken stack from moe’s?
Great job.
you have to come up with tremendous downpayment plus u r tax returns has to show enough income and stability to get approved for loans for these properties. Are u not making this sound too simplistic ?
If you are doing conventional, yes, you're right. But I think all these guys use hard or private money, small down payments, partnerships, master lease, etc.
If you buy a small good priced complex with conventional 20% down you should definitely be able to cash flow more than $100/$200 per unit...
@@somos6430 Imagine half of the units giving you rent unpaid, or something like natural disaster tearing right thru anything could happen
@@marcduchamp5512 That's why it is important check credit, take deposit and last month's rent....Qualification is key!
Also, in Florida(before the PLANdemic and pretty soon again), you could remove a non payer in less than 2 weeks after missing a single monthly payment.
How do you handle getting more than 2 houses if you have vacancies? How do you get a down payment for each new house? Are Yup out saying you sold one house and bought a bigger multiunit house? For example year 1 one unit, year 2 two units, year 3 four unit single house, year 4 you have a 8 unit building? Or are we talking about multiple separate buildings?
Just stay positive. That’s your first problem
I’d like to hear about the opposition to CRE more
Great Video
Good here 👍🏽
How do you keep funding the deals if you run out of money?
I make 21$/hr at my job at the moment, i have a credit score of 740, and i have about 16k$ in equity at the moment. It is possible to do this for me? What should be the price range in the 1st house I buy? or the second and third?
and 1 more question: should you buy a house that's ready to rent day 1? or one that needs work? or a forclosure?
BlameLogic yes it is man, I am a college student I'm going to be buying my first property cash. Keep your head down and work hard saving.
I'm in a similar situation as you. What I'm currently doing is looking for cheap move in ready duplex that needs a bit of work but isn't terrible. I will live in the uglier unit and rent out the good one. Or, if you don't mind living with people, get a single family and rent out the rooms. I don't want to share a kitchen/bathroom with other people so I'm going for the multifamily properties. I'm only going to put 5% down or less if allowed. Over time I will do renovations as I can afford. Once I got the property all fixed up, I'll sell it for a profit. I'll then take that money and repeat what I just did until I have a good chunk of change to start doing BRRRR's. I'm thinking $75 -100K is a good starting number. By then I should have enough experience to start being able to get partners and investors to work with me on future deals. Once I have $75-100k saved up, I should be able to do some cash deals and just bypass the banks all together. You can only get so far with the banks before they cut you off. Going to be slow going starting up but it will snowball eventually.
Your 7th year if you leased em all out you’d be a multi-millionaire. if you used kris krohn lease technique
What’s that
literally doing this exact thing now... on to complexes soon
So you have 7 units congrats
@@ryanthepianoman27 17 meow... only a small fry still =(
@@Bishop_Realty guess how many I have… 0
Great vid, thank you so much!😎
2018, Brendon streaming on a flip phone LOL
Where is all of this down payment money coming from?
You need to be a millionaire just to come up with the down payment money.
Partners
Equity
@@ApartmentKing66 Did you partnered with someone?
how can i afford a 60 unit propety after 7 years? how tf am i gonna get that downpayment using the "stack"?? the downpayment on a 60 unit is huge, how tf am i gonna get that down payment
Great Video Thanks
Amazing bro
Great info
How are you paying these units off if your only making $100 a month with a 30 year mortgage.
What states did you buy your property in? Any suggestions of areas for 2021/2022
I haven’t purchased my first property yet on account of student loans but I have been doing a lot of research. Look at net domestic migration. Basically which states are people bailing and leaving and which have the greatest influx of people. Then you can look at things in the state like popularion growth of cities, crime maps, schools, average annual income increase, average rent increase etc. Some states make it difficult to evict somebody too and are not landlord friendly. Some people even try to find out if there are a lot of building permits getting approved too because it means the area is growing. Personally I would avoid California but that’ll be easy because I don’t live there.
@@AJohnson0325 thank you for this response. Very helpful 😊
What's the full list of books you suggested to read in the video and are there any more?
I can hear you!
Is it possible to own 1 rental property in each state? That's my goal.
yes, the only limit is the one you put on yourself
Aim for each street in the world. If you reach that aim for two and continue.
I'd say aim for every house in the world. You'd be Mr. Renterman😱
Would it not be good in your opinion to start with a small Multi family like 2-4 units, instead of single family, for the first step, in this process?
year 20 you can buy 524,288 homes
If you syndicate 100 units with 100 investors, all you have is the cash flow of your share, 1 unit. If you want the cash flow of 100 units, you have to create value equal to the equity of 100 units, or put in the downpayment for 100 units. Either way, no easy task. Stacking is not the challenge.
Doesn't work like that. In syndication you get enough cash from investors to secure a down payment you own the bulk of the property and get the equity pay down. You pay the investors the dividend and take what's left over. You agree with the investors what is fair in terms of dividends and return on capital that's the deal making part. And alot of that depends who your investors are.
You also charge a on going managment fee to manage the property
Big money is in syndication not many know how to do it. It's my plan to get there. I just need a bit more credibility behind me first
Brandon, you seriously need to find $100 in your financial empire and invest in a lavalier microphone. The echo is horrible. You are talking from inside a tin can.
Thanks for the info though, always good stuff.
And soundproofing tiles on the walls..as much as I love Peter Harris' videos, he has the same problem.
Most of his videos don't have this issue anymore.
How to get loan for a apartment complex? Million dollar loan?
a mix of business credit as well as private investor's. Personal credit can be used but try other options first
Go to a bank. Ask them they are the ones that give it to you
Not usually. Most standard banks have limits on what they lend investors. I.e here in canada my bank gives me a limit of 500,000 in RE investment loans, or 5 seperate mortgages. You can tap out on banks pretty easily early in the game. You will need private banks and finance companies to fund the mortgages on your commercial properties usually after that. The hardest part of real estate is coming to conclusion that you will 100% definitely need JV partnerships if you want to scale, it is unavoidable. If you are not an outgoing person it will be tough to build relationships with people who will be willing to lend you hundreds of thousands of dollars for down payments. @@thestrappingentrepreneur2822
Chase is good at multi family lending. If your situation isn't as clean, other smaller banks are good. We have a 1.76M loan with a smaller bank on our building
I see you
F*** YES
If you're not netting 10% minimum from the home in cash flow you will fail. How do you make 10% ROI. The numbers tell you, if you don't know your numbers you will never make it. You must make the home nice. If renters move in and move out every year you will never hit 10% ROI because you will always be spending money on make readies. It has to be worth your effort 100 - 200 month per property forget about it. Apartment complexes are not for beginners. KISS. If you have any doubts about what I am saying research the financial crisis of 2007-2008. If you only make 10% ROI after all expenses you also have appreciation which could net you 13-15% per year or more if price appreciation jumps.
the risk of market change was not add it in. like rent decrease and purchasing price too high.
The state of the market is irrelevant, all that matters is the ratio between expenses and income at the end of the day
Register (edited): sadly no pop up
great video but the capital needed for a single family and a 32 unit complex is obviously completely different.. how are you going to get the capital to purchase a 32 unit complex in 7 years? yes, i understand you may save the cash flow from previous properties but my question still applies to those properties as well.. not much cash is needed for a single family all the way to a 4plex but once you start looking into bigger properties that’s when things take a real jump. love the video though, put things into perspective but still trying to wrap my head around how someone is gonna go from buying a single family home for let’s say 100k, to buying a 32 unit complex for 10 million in 7 years
Hype!!
How is it different?
@@ryanthepianoman27 loan types are different. it’s easier to get approved for a 700,000 dollar 4plex compared to a 32 unit, 5-10 million dollar complex. i understand that all you need to do is create your real estate portfolio, have great cash flow history, and a good financial statement to show the banks but still. there’s different levels to this. same concept but different levels. especially if you wanna accomplish this in 7 years. better get used to asking people for money.
hello brandon can i buy a property with your help?
Yes Cincinnati! That’s where I live!
I have 5 units + i house hack. Wasnt easy. You need a good w2. Find owner finance deals (found 3 units this way). Use other people's money who believe in you - capital is hard to come by.
I can hear and see you.