HI Luke, just finished up our first BRRRR attempt in WA. Bought a $320,00 property on a 900m2 block built a $200,000 3 by 2 granny flat. Front house tenanted at $420 per week granny flat tenanted at $450 per week. Put about $43,000 of improvements into the property. The main issue I had throughout the process was that banks don’t really know how to value this arrangement so getting finance for the building loan was a bit of a struggle with a lower deposit. A few agents in the area are fairly confident that we wouldn’t have any issues getting $600,00 if we were to sell though. Currently saving for the second property and your videos have been great motivation to do better on the next deal.
Am I right in saying this strategy is currently harder to do with interest rates at 6-7% . To scale quickly you would be needing new acquisitions to be positively geared right from the get go. I may be looking at the wrong deals currently, but I cant quite get my head around going from my current investment to scaling to a second without using all of my serviceability. I do understand looking for renovations to manufacture the value, the last one I did cut it very fine with the costs very much like the chunk deal that made 10-15k for you. So its not always a sure thing.
Think this is one of your best videos yet. I’m very curious about the value of my current PPOR and would love to access the equity in it to use to invest in either another place or even shares (via debt recycling). House I’m petrified of a bank valuation coming back below what we paid (as we bought peak COVID boom and rates have to some extent impacted the market). Where I’m going with this: Does this BRRRR strategy assume that one would have equity in your home after adding in “sweat equity”? How would one deal with the risk of negative equity?
Thanks! The strategy is all about manufacturing equity in a short period of time to leverage and go again. If you're in a situation where you've got negative equity or a low bank valuation, you'll be stuck until you're either able to save your next deposit or the value of your property recovers and increases
Can you go over offset vs redraw? I have seen something essentially saying that it is 'dirty debt' when you pull from your redraw for personal purchases. But it has given me the freedom to put almost all of my available funds into my loan while having access to it immediately if i have a big bill occur
66k saved and 850k buy? Was this your first purchase? Under 10% equity is wild. Question, what kind of paint sprayer did you buy? Ive got a lot of paint jobs coming up, and intend on buying another house very soon to renovate/rent/revalue/repeat. So purchasing my own just makes sense
Hi Luke, thanks for the video and summarising the strategy. I'm wondering whether this would work with an apartment as your first property? Unfortunately the cost of houses now within inner Brisbane are all prohibitively expensive.
Great content here as always Crypto is bringing a different revolution in the world economy. People who are optimistic investors earn consistently.... others will just sit and watch. Already making over $56,000 profits and hopefully more in next bull run
Great video mate! We bought in Rocklea in a street that doesn’t flood and made roughly 250k in the last property boom, 10km from the CBD, right now though even if we put our place up for rent, rent won’t cover the mortgage in this financial market, what do you suggest?
Timing is key though. Anyone who bought property (almost) anywhere in 2018 has done well over the past five years...and no disrespect...but some may say it was simply a case of "dumb luck." 2023-2028 may bring very different scenarios though.
I wouldn't say it's luck if you continued to build a portfolio. Maybe if you'd bought 1 property and it has gone up through the boom. But to create a larger portfolio takes a lot more work / knowledge and skill in my opinion
@@lukewiles1You're preaching to the converted and a long term investor (25 years) with several properties in both NSW and QLD. With that said, however, obviously capital growth has varied in terms of 3/5/10 year timeframes over the previous 25 years. So if you'd started to buy in Brisbane in 2015 instead of 2018 your five year performance would be much less impressive. And I've obviously enjoyed the boom from 2020-2023 and the previous other booms as well but I'm honest enough to admit that I didn't see them coming though. So anyone who's held multiple properties for 25 years will say that it's about having the balls to hold for a long period of time...despite the constant fearmongering...and there isn't essentially much skill required.
@sunseeker7099 yes agreed ! If we'd bought 2015 rather than 2018 the returns wouldn't seem as crazy. All about the long game! Great to hear you've been able to build and hold a portfolio for 25+years
HI Luke, just finished up our first BRRRR attempt in WA. Bought a $320,00 property on a 900m2 block built a $200,000 3 by 2 granny flat. Front house tenanted at $420 per week granny flat tenanted at $450 per week. Put about $43,000 of improvements into the property. The main issue I had throughout the process was that banks don’t really know how to value this arrangement so getting finance for the building loan was a bit of a struggle with a lower deposit. A few agents in the area are fairly confident that we wouldn’t have any issues getting $600,00 if we were to sell though. Currently saving for the second property and your videos have been great motivation to do better on the next deal.
Way to go bud! Which bank finally understood it?
Thanks guys. Always nice to train while listening you you both.
This upload was highly needed!
Am I right in saying this strategy is currently harder to do with interest rates at 6-7% . To scale quickly you would be needing new acquisitions to be positively geared right from the get go. I may be looking at the wrong deals currently, but I cant quite get my head around going from my current investment to scaling to a second without using all of my serviceability.
I do understand looking for renovations to manufacture the value, the last one I did cut it very fine with the costs very much like the chunk deal that made 10-15k for you. So its not always a sure thing.
Thanks Luke. Smart advice.
Awesome, thanks mate!! 🎉
Think this is one of your best videos yet. I’m very curious about the value of my current PPOR and would love to access the equity in it to use to invest in either another place or even shares (via debt recycling). House I’m petrified of a bank valuation coming back below what we paid (as we bought peak COVID boom and rates have to some extent impacted the market). Where I’m going with this: Does this BRRRR strategy assume that one would have equity in your home after adding in “sweat equity”? How would one deal with the risk of negative equity?
Thanks! The strategy is all about manufacturing equity in a short period of time to leverage and go again.
If you're in a situation where you've got negative equity or a low bank valuation, you'll be stuck until you're either able to save your next deposit or the value of your property recovers and increases
Can you go over offset vs redraw? I have seen something essentially saying that it is 'dirty debt' when you pull from your redraw for personal purchases. But it has given me the freedom to put almost all of my available funds into my loan while having access to it immediately if i have a big bill occur
66k saved and 850k buy? Was this your first purchase? Under 10% equity is wild.
Question, what kind of paint sprayer did you buy? Ive got a lot of paint jobs coming up, and intend on buying another house very soon to renovate/rent/revalue/repeat. So purchasing my own just makes sense
Yup that's right. First property was under a 10% deposit.
We use the wagner control pro 350m. Best $1000 we've ever spent!
Thanks for the details. Could you guide me on locating a renovator in Melbourne who can undertake and successfully complete the project?
Hi Luke, thanks for the video and summarising the strategy. I'm wondering whether this would work with an apartment as your first property? Unfortunately the cost of houses now within inner Brisbane are all prohibitively expensive.
Great content here as always Crypto is bringing a different revolution in the world economy. People who are optimistic investors earn consistently.... others will just sit and watch. Already making over $56,000 profits and hopefully more in next bull run
I’m so happy hearing people talk about my broker here. i started trading within th her in 2020 with $2500. now my portfolio is over $85000
Aww ☺️ I texted your broker and she responded, I’m so happy guys thanks 🙏 for this vital info
I’m hitting her up asap, can’t wait to make good profits in my investment
Great video mate! We bought in Rocklea in a street that doesn’t flood and made roughly 250k in the last property boom, 10km from the CBD, right now though even if we put our place up for rent, rent won’t cover the mortgage in this financial market, what do you suggest?
Talk to your accountant, and how negative gearing works. Rent rarely covers the cost of the mortgage let alone all the other operational expenses....
That’s tax free money rite that u took out too cause the renter pay mortgage so u have no gains and how do u set up a company and trust to do that
Timing is key though.
Anyone who bought property (almost) anywhere in 2018 has done well over the past five years...and no disrespect...but some may say it was simply a case of "dumb luck."
2023-2028 may bring very different scenarios though.
Most of this gurus bought during the last 5 years and were lucky.
I wouldn't say it's luck if you continued to build a portfolio. Maybe if you'd bought 1 property and it has gone up through the boom. But to create a larger portfolio takes a lot more work / knowledge and skill in my opinion
@@lukewiles1You're preaching to the converted and a long term investor (25 years) with several properties in both NSW and QLD.
With that said, however, obviously capital growth has varied in terms of 3/5/10 year timeframes over the previous 25 years.
So if you'd started to buy in Brisbane in 2015 instead of 2018 your five year performance would be much less impressive.
And I've obviously enjoyed the boom from 2020-2023 and the previous other booms as well but I'm honest enough to admit that I didn't see them coming though.
So anyone who's held multiple properties for 25 years will say that it's about having the balls to hold for a long period of time...despite the constant fearmongering...and there isn't essentially much skill required.
@sunseeker7099 yes agreed ! If we'd bought 2015 rather than 2018 the returns wouldn't seem as crazy.
All about the long game! Great to hear you've been able to build and hold a portfolio for 25+years