Man, I really love the internet. we are the first generation in human history that has access to anything we wish to learn. Can you imagine how lucky we are!!
This is so true. There is no need to reinvent the wheel. You find people who are successful in what they are doing, and THEN DO THAT. Tweaking as you go along and learn more.
This is actually THE video that turned me into a full time real estate investor 4 years ago when trying to figure out what to do with my second home. Crazy to see it now and look back at the journey so far.
BP was one of the TH-cam channels that turned me into a real estate investor as well! While I'm part-time (only two properties but they cash flow me $1100/mo) but I'm still on track to retire in 4 years (I'm only 25 now)! I talk about my experiences and knowledge on my TH-cam channel!
Just want to say that these type of videos (online lecture format) are revolutionary. As a college student who had to endure Zoom classes with professors who just sent us the syllabus and online worksheets, this video supersedes the quality of my $15,000 a year education. Please continue with this type of content!
So perhaps your professors are actually just lazy flunkies who went into academia because it shielded them from having to perform? And maybe, your diploma is not only not worth the money you paid, but might have even dumbed you down? Who knew, right.
Real estate investing can be the single most powerful type of investment in the world. Knowing how to analyze properties is only a small part, but a very important part. Thanks Brandon!
Have been coming back to this video every year just to make sure that my math is still mathing and dont miss anything in my calculation. Thanks, the beard, man.
1st Brandon inspired me to buy a few rental properties and then inspired me to make my TH-cam channel that I do for fun. He has changed my life in more ways than one.
I'm 16 and a junior in high school, and I'm starting to watch these videos. When I'm 18, I'll become a real estate agent on the side in college and learn so I can save money to rent in my 20s. Keep up the good work!
Why bother going to college and rack up a ton of debt when you can just get a job save money for your first down payment and buy your first rental property and keep on going from there. By the time your friends finish paying off their college loans you could already have several properties.
I just bought my first property up and Roseburg Oregon. $230,000 for a duplex but I am changing it into a Triplex. Based on the calculations of this video my cash-on-cash return will easily be above 10%, probably closer to 13%. And I already got two of the units rented out.
I hope, what you plan is all legal. Don’t forget to take out permits with the city for the work being done. If you don’t follow the law, you could wind up paying big fines or told to dismantle the illegal apartment. Good luck.
Pretty obvious analysis. I did the same when I was buying my properties. However, I have to give a credit for such simple and clear presentation. Well done 👍🏻
I honestly think deal analysis should be a bulk of your videos. Also touring properties with agents, and providing the analysis would be a great learning tool for all types of investors. It could also be fun, if you made it like a series.
100% agree. One of the interesting things here is... its simple to look in a book for the calculations. The issue begins with research and problem solving. Maybe more informative things for research instead of “go talk to someone in real estate”. When you could in turn guide them through an example process
@@birdswakeme651 Agreed. Perhaps break down each small point on a video like this, and expand on it and make it the focus of its own dedicated 30 minute video with anecdotes, actionable items, and interviews with industry experts.
Lately I've been very interested in building a rental property portfolio. As a beginner who has knowledge in finance, you make it so easy for me to assimilate all the nuances that exists in the real estate industry. I am simply grateful for the knowledge. I am gonna continue with my learning, build up my funds and approach it well.
Nice content! The best way to find that balance between saving and living is by investing, this way you get to have your savings intact and then live comfortably of the revenue coming in from your investments.
Working with Romero pieto is the best thing that can happen to a beginner trader who is aspiring to be fruitful out of the market he is trustworthy and straightforward we surely need more men like him in trading world.
Mr Romero pieto trades on my behalf due to my tight schedules and he is indeed absolutely doing great, my last investment of $5,000 he gave me my ROI of $37,000 in a period of a month isn't that amazing.
Hey man, I'll be investing once I save up a little nest of money. what is your cash on cash ROI for each property of yours? greatly appreciated if you share to help me out on what range I should be aiming for!
@@briz6368 Unsure about Jason but CoC is just based on your own investment goals and the strategy you are using to attain the property and that properties price point. CoC can vary wildly and even be infinite if you have zero of your money in the deal. In general, though you probably want more than if you put your money in the stock market so a nominal 10% plus is reasonable starting out if putting in a standard down payment.
It’s great that you’re attempting to simplify the numbers part of this. That is where so many people go wrong, they generally understand the process but are not able to run the numbers properly, of course that’s a recipe for disaster. Good work.
Me and my sister are getting into real estate she's in school for it and I'm in trade school for property maintenance and welding. Bigger pocket vids are so helpful for me. Thanks man.
I wish I had studied this stuff before I dumped a buncha cash into real estate. Lesson (cost me a fortune, I'm giving it out for free): Do not pay too much attention to advice from friends, even if they do know more about the real estate game than you do. Do your own research. Blind optimism will likely lead to places you do not want to go.
Seen this video years ago had to search for it,didn't remember the channels name or what the guy looked like.But I found it!! An it was just as helpful today as it was when I first seen it if not more
I bought 3 low end foreclosed properties for $33k from one bank and up-fitted them for $12k. I contracted with the Housing Authority for tenancy so I don’t have to chase the money like I did in the past with high-end properties. I receive $2700 monthly. Rock N Rolling
Awesome breakdown Brandon :) I'm a foreign Real Estate investor from Canada. I watch every BiggerPockets podcast and have learned a lot from them. Thanks! :)
This is great stuff, IMO this should be taught in High Schools across the U.S. A financial education is key to success, without it we have people making millions and still going broke.
Almost all of the students would blow it off and not pay real attention. However, a handful would get interested and use this knowledge. Not everyone can be responsible and dedicated to investing. This is why about 65% of adults live paycheck to paycheck with less than 10 k in savings.
Just wanted to come back to the video and book that started it all for me. Bought 10 units my first year using this book and method, and just went under contract on a 24-unit apartment building. The math is a little more complex with investors involved, but this video is a fantastic start for anyone.
Repairs are an important part that is frequently overlooked by investors because they don't have a clue as to what they might be. Newer properties tend to be less, older properties tend to be more, unless you are a slum lord, then there aren't any repair costs.
Really appreciate this video out of my entire time ever being on TH-cam. Best education I've received with some real "how to's" bc ppl tell you that you can do well but they never tell you HOW. THANK YOU GRACIOUSLY for this one specific video 💗💯💯🎯
I used your method and a year later I found a perfect duplex in Texas. One year later and it did workout as a profit. Your method definitely helped when purchasing a property and getting the “Feelings” out of the way because the numbers are what matters. Thank you
My credit score went up with Credit PatchUp LLC and when I couldn’t continue with payments they further assisted me with steps I can take myself. Those step impacted my score positively. Happy customer here!(Tina@creditpatchup.com)
Pro-tip: When writing on a whiteboard, most of the movement is in the shoulder, even with small print. It's the opposite of pen and paper: the pad of your hand stays off the board and your wrist stays fairly still.
i want to say thanks to youtube algorithm to show me this video and second i want to say thanks to you, you got a new subscriber and future real estate investor. this kind of numbers are selling by "financial coach" for a lot of money
The lease fee makes an assumption it is for a 12 month lease, so is certainly a factor on annual ROI. If you can have the tenant sign an 18 month lease or longer, it decreases expense and increases ROI.
@@CodyStegeman Good point. If you have a good tenant, that's happy to sign for longer, then you're in luck. I have one recovering from bankruptcy, and signed for a 2 year lease. He's happy to stay put as he's trying to rebuild his credit.
@@maxxfeldman6244 Sure could. Where I have my properties, if it does increase, it's not going to increase more than the value saved by signing for longer. I imagine some markets have that capability, such as NYC, LA and probably a few others. For my money, I'll sign a longer lease.
Hey Brandon. Love you BP pods!!! Wow. So how many calculators I have to use to fgure out a good house investment? Isn't $ 7,000 for a rehab very cheap when you gotta figure out EVERYTHING about the house (foundation, plumbing, electric kitchen remod & cabinets & new appliances)? That just seems verry cheap. What is recommended for a cash on cash ROI? Where's the cutting off point? Or is 9% the lowest acceptance before you check out another prop?
His numbers are pretty accurate which is why I am no longer a landloard! All the work and aggravation and if you are LUCKY you earn 10%! never again, what a nightmare! This is ten years of owning rental properties and same stories from other landlords I meet
I agree to a certain extent but it's not that bad. I have 5 Single Family Homes and it doesn't bother me much. Worst case, hire a property management firm.
And if you consider the equity and appreciation, it's way more than 10%. I put 50k down on a property earlier this year, the overall return YoY is about 16k.
I sold my first house after living in it for 5 years because I didn't wan the hassles of property management. Dumb! If I had paid a property manager his lousy 10% the tenants would have paid the mortgage and the manager and everything else and 15 years later I could have sold it for 400,000 on an original purchase price of 21.000.
He is paying a premium on rehab, I know plenty of workers in the renovation business who can work for a fraction of that and give you the same quality of work. Reputation is key.
Amazing video to become one of the next millionare , iam talking about. Rich in knowledge, think wise, wisdom , intelligence , smart ,financial education is more important then just 💰
Something I invested in was vacation rentals. Double the rent in the desired season. Better than making the same every month and VRBO and trip advisor are there to make it easy.
Thank you SO much for sharing this! I've been looking for this information for quite a while and so appreciate that you posted up so straightforwardly like this! The way that you presented this is simple, understandable, and well organized!
Very informative video specially for us looking to dive into rental properties. What was not discussed and is a big part of the rental property expense is the rental income will be tax as capital gain at the end of the year.
Successful people don't become that way overnight. What most people see at a glance wealth, a great career, purpose is the result of hard work and hustle over time. I pray that anyone who reads this will be successful in life
Buying a property as an LLC can add an extra layer of protection if you end up in a lawsuit. It can also help to set up an LLC for each property that you own so they act as independent businesses. Where it really comes in handy is if you are syndicating a deal and raising capital from others. Buying the property as the vesting LLC gives people the peace of mind that they are essentially on title for the property. If and when you do sell, it makes it much easier to do an exchange into the next property. The one thing to be worried about is if an investor does want to cash out their shares then they have to be replaced by the remaining investors or by a new one.
This is where airbnb comes in! I've done over $3,000 a month on 2 bedrooms inside a property that cost much less than $200,000. Those are the type of returns I like to see in real-estate.
Alexander Golovin did you get that kind of return without fixing up the property n was it single family or multi? I am out of Columbus, OH and had to update n fix them up first to make about 15% cash on cash return
Thank you for this video, definitely helped me. I had to use 25% down for duplex in Texas. Lots of headache and stress though about tenants on how will they treat property and repairs. Either way, long term is the way to go in my opinion.
@@ryanthepianoman27 it turned out good. After 2 years with rent increased, profit has gone up but definitely 10-15% of revenue for repairs. Only issue is I wish I would of bought more in 2019 lol.
It's a distraction. You cannot chase the ebbs and flows of tenant occupancy without taking your focus away from the big picture, which is to keep the house occupied long term. There's also the risk of an Airbnb customer trashing your home - more likely than a tenant who fills out a proper application and signs a real lease.
Very funny... Don't you know this is all called 'The accounting formula'. It's why the cost of living is such a mess. Before the invention of the accounting formula a store would sell stuff cheap to get customers to buy stuff... After the invention of the accounting formula someone made it illegal to sell something for less than what was paid for it even if it would generate a huge amount of future business.... That in turn generated 'Black Friday'. Because businesses were caught in the middle of the competition.
@@oopalonga the peanut butter as a color reference comes from the speech given in the video. Used to show how some people focus on really strange things rather than things that truly make a difference.
When comparing the ROI of rental property to stocks don’t you have to take into account risks of the two investments. When you have all your money in one property you would have bigger risk than say having it in index funds. What do you think? I’m asking this because I have most of my assets in one rental property and I would like to know if it makes sense to sell it and invest somewhere else.
Im in the same boat as you. Plus I sold my last rental and used the equity for the next rental. My cash on Cash ROI square doesnt look good but my Cash flow square is double the example in this video.
Question: (Assuming one has several properties simultaneously) Should the CapEx be limited for use, or do all the CapEx funds (from various properties) go into a general pool that you can pull from when one property is in need? And for the repair months expense fee? Lastly, thank you for this video/resource platform! I truly learned a lot.
Depends how you bought the properties. If they are different owners like LLCs or names, they would most likely be independent of each other. What you can do is have the CapEx be taken out from the cash flow so you never actually put your own money into the property. Obviously this has to be done after a year or 2 once you have enough cash flow to cover your capex
There is major factor that he missed when calculating the Annual Cash on Cash ROI. What about the portion of the mortgage payment that is being allocated to the principle. Paying down your principal means you are lowering your debt and increasing your equity. That is definitely a GAIN in my book that should NOT be overlooked when doing your numbers. Lets say you pay off about $3,000 of your principal in year one (which only gets higher in future years), calculate that with the $50,000 invested gives you another 6% ROI. Its's not cash in hand but it is $3,000 in equity, which is like money in the bank. With my calculation, the ROI would go from his 9.3%(cash on cash) + 6%(equity) = 15.3% overall ANNUAL ROI. Obviously the numbers that he is using are a little off for a project that only needed a $7K reno, but leaving that aside and just focusing on the calculation for your ANNUAL ROI, don't forget to take into account the new equity you gain every year. It might make the difference in taking a deal or not.
This is a cash flow so it's determining how much cash will you have available at the end of each month. A mortgage is a fixed amout each month so whether the payment is allocated to interest expense or towards the principal, the cash out amount doesn't change until the mortgage is paid off.
@@annasaricicek8771 Or you sell the property. Which I guess is more likely to happen before the mortgage is paid off. In that case, you have to take that additional 6% into account as well.
Cash on Cash ROI is a great tool to utilize when one has a mortgage on the property. I used it and this 4 square method on the first property I invested in with a partner. If one is able to pay cash for a house, I wonder how the cash on cash ROI would change things, because it wouldn't look good in that square. I guess thats where the overall or internal rate of return becomes more important.
Biggerpockets, how do you determine what a property rents for? In your example you used a duplex and assumed they rented for $1000 each. But is there a standardized method for determining the actual rent price on a house, duplex, or otherwise?
my method would be the total cost divided by the months of years say you paid 57000 for the property and the term you have for your renter is 5 years so that would be 57000÷60months which is 950and thats how much it will have to be a month in order to get your money back
i compare what similar homes rent around the area, also the quality of the home, is it remodeled or is it dated after that research is done i list for 50 to 100 more on my estimate and if someone ask me to lower rent there is room for negotiations
Rent has nothing to do with what you paid. Its all about the rent market in your particular area. In larger cities, rent can change daily based on the going price people are willing to pay and of course supply and demand.
Man, I really love the internet. we are the first generation in human history that has access to anything we wish to learn. Can you imagine how lucky we are!!
not evrything
This is so true. There is no need to reinvent the wheel. You find people who are successful in what they are doing, and THEN DO THAT. Tweaking as you go along and learn more.
Someone finally realizes and appreciates this
Indeed!!!
Yup whoever isn’t using it for learning is missing out
This is actually THE video that turned me into a full time real estate investor 4 years ago when trying to figure out what to do with my second home. Crazy to see it now and look back at the journey so far.
Can you give some tips which can help me because I haven't started I am very confused what to do hope you reply
@@JaiHind-gd8do well first you just need to have a second home
@@michaelparry2162 sir can you further elaborate hope you don't mind
BP was one of the TH-cam channels that turned me into a real estate investor as well! While I'm part-time (only two properties but they cash flow me $1100/mo) but I'm still on track to retire in 4 years (I'm only 25 now)! I talk about my experiences and knowledge on my TH-cam channel!
@@JamesHollowayYT thanks sir your guidance meant a lot #staysafe.
Finished this man’s book 5min ago, searched TH-cam and now here he is again teaching me the next lesson lol
Even with a zero cash flow you're still building equity while you are paying off your monthly installments of the loan.
Excellent video by the way!!!
Just want to say that these type of videos (online lecture format) are revolutionary. As a college student who had to endure Zoom classes with professors who just sent us the syllabus and online worksheets, this video supersedes the quality of my $15,000 a year education. Please continue with this type of content!
Thanks for the feedback.....for more information *+1/6./1./.7../4./..6./..5./..5.../3../4../7*
W •H•A•T•S•A•P•P.••••M•E 🔅 🔅 🔅 🔅 🔅 •••••........
So perhaps your professors are actually just lazy flunkies who went into academia because it shielded them from having to perform? And maybe, your diploma is not only not worth the money you paid, but might have even dumbed you down? Who knew, right.
Exactly, and these guys told me I was stupid for not going to college for this.
like bro, it's free. I'm not paying 20K+
Real estate investing can be the single most powerful type of investment in the world. Knowing how to analyze properties is only a small part, but a very important part. Thanks Brandon!
The Four Square method is used all over TH-cam for many topics. I'm using it to find a life partner and a better coffee.
Better coffee is probably much simpler & less
Complicated 👌🏽😅
hahaha
Anytime I see a four square I think of my days selling cars and using a four square to close customers. Lol.
@@rogelioestanislaojr3261 - Same same
same here..got a new truck for my wife ...was a good deal !
Thank you, have been watching your channels for couple of weeks now and it's really good and really helping me through
I'm 50% ADA 50% BTC 5 year hold
ADA and DOGE, a winning combination
Like you said, those are the only two i see holding at this time
When did ETH go from 6% to 5% when staking to ETH2?
Thanks you for your update am long term holding. I love dogecoin
Have been coming back to this video every year just to make sure that my math is still mathing and dont miss anything in my calculation. Thanks, the beard, man.
1st Brandon inspired me to buy a few rental properties and then inspired me to make my TH-cam channel that I do for fun. He has changed my life in more ways than one.
This video literally changed my life. It broke down this analysis in such simple terms. This is what helped me go from thinking to doing.
This is the first real estate video I ever watched. This lead me into almost every episode of bp podcast and now owning several rental properties
I'm 16 and a junior in high school, and I'm starting to watch these videos. When I'm 18, I'll become a real estate agent on the side in college and learn so I can save money to rent in my 20s. Keep up the good work!
Why bother going to college and rack up a ton of debt when you can just get a job save money for your first down payment and buy your first rental property and keep on going from there. By the time your friends finish paying off their college loans you could already have several properties.
If your gonna be a realestate agent you better start looking at mini skirts and knee pads now!
How did you do with all the property
I just bought my first property up and Roseburg Oregon. $230,000 for a duplex but I am changing it into a Triplex. Based on the calculations of this video my cash-on-cash return will easily be above 10%, probably closer to 13%. And I already got two of the units rented out.
I hope, what you plan is all legal. Don’t forget to take out permits with the city for the work being done. If you don’t follow the law, you could wind up paying big fines or told to dismantle the illegal apartment. Good luck.
Brandon thank you for breaking this down....found bigger pockets last year and trying to follow your guidance... Acquired our 1st door this year...
I make over $10,000 every month thanks to blockspace
Congrats.
How’s it cash flow
David Fredrickson what is block space
This is the first time I have seen this U tube about rental property. I have learned a lot and I am going to
check out more.
Pretty obvious analysis. I did the same when I was buying my properties.
However, I have to give a credit for such simple and clear presentation. Well done 👍🏻
Fast talker specific information, easy to understand, and not to many ads. Love it!
I honestly think deal analysis should be a bulk of your videos. Also touring properties with agents, and providing the analysis would be a great learning tool for all types of investors. It could also be fun, if you made it like a series.
yeah they need more videos that walk you through things and show you how to apply strategies and analysis
Aleem Jinah please ignore hate speech. God bless you.
I report all hate speech immediately. People are ignorant.
100% agree. One of the interesting things here is... its simple to look in a book for the calculations. The issue begins with research and problem solving. Maybe more informative things for research instead of “go talk to someone in real estate”. When you could in turn guide them through an example process
@@birdswakeme651 Agreed. Perhaps break down each small point on a video like this, and expand on it and make it the focus of its own dedicated 30 minute video with anecdotes, actionable items, and interviews with industry experts.
Lately I've been very interested in building a rental property portfolio. As a beginner who has knowledge in finance, you make it so easy for me to assimilate all the nuances that exists in the real estate industry. I am simply grateful for the knowledge. I am gonna continue with my learning, build up my funds and approach it well.
Had to come back to the video that started it all - this was the first video we used to first learn how to analyze a property! Classic
Nice content! The best way to find that balance between saving and living is by investing, this way you get to have your savings intact and then live comfortably of the revenue coming in from your investments.
His trade execution quality and profiting is well structured with great financial features.
Working with Romero pieto is the best thing that can happen to a beginner trader who is aspiring to be fruitful out of the market he is trustworthy and straightforward we surely need more men like him in trading world.
Good good content.
I've seen so many review about this man called Romero pieto who is he ?
Mr Romero pieto trades on my behalf due to my tight schedules and he is indeed absolutely doing great, my last investment of $5,000 he gave me my ROI of $37,000 in a period of a month isn't that amazing.
Thanks for the very informative and comprehensive explanation.
Legal fees of $100 should be considered next to repairs in the event of an eviction.
Rob M Why not mark it $1000; since we’re just throwing numbers out there!
Proof that economics and math are related but not the same.
I prefer watching your videos rather than go to the college to learn the same things and nothing is important. Love your videos sir. Godspeed!!
I would like to thank Brandon for everything he has taught me. I currently have 3 rental properties and I intend to get two more next year.
Hey man, I'll be investing once I save up a little nest of money. what is your cash on cash ROI for each property of yours? greatly appreciated if you share to help me out on what range I should be aiming for!
Congrats! Good luck in all your future REI ventures.
@@briz6368 Unsure about Jason but CoC is just based on your own investment goals and the strategy you are using to attain the property and that properties price point. CoC can vary wildly and even be infinite if you have zero of your money in the deal. In general, though you probably want more than if you put your money in the stock market so a nominal 10% plus is reasonable starting out if putting in a standard down payment.
Freedom Rental Properties
Thank you much.
I make over $10,000 every month thanks to blockspace
It’s great that you’re attempting to simplify the numbers part of this. That is where so many people go wrong, they generally understand the process but are not able to run the numbers properly, of course that’s a recipe for disaster. Good work.
I watched this video about 4 years ago before buying my first home. It kinda changed my life,
Me and my sister are getting into real estate she's in school for it and I'm in trade school for property maintenance and welding. Bigger pocket vids are so helpful for me. Thanks man.
Smart, hope that goes well.
Sigma Ligma deez nuts thank you!
Never partner with family
How did it go?
I wish I had studied this stuff before I dumped a buncha cash into real estate.
Lesson (cost me a fortune, I'm giving it out for free): Do not pay too much attention to advice from friends, even if they do know more about the real estate game than you do. Do your own research. Blind optimism will likely lead to places you do not want to go.
So waht happened to you? Sounds like you got an interesting story to tell
^
David is now a full-time Carpenter trying to make up for all the money he is losing in his real estate investment
@@aaron26c 😂😂😂😂
how do you fuck up on real estate?
Seen this video years ago had to search for it,didn't remember the channels name or what the guy looked like.But I found it!! An it was just as helpful today as it was when I first seen it if not more
Brandon you have a gift of teaching, you make the process understandable for the beginner. GOD BLESS YOU
He certainly does. Thanks for watching and thanks for leaving some feedback! We appreciate it :)
Wow. Thank you. This is truly one of the very few channels that provide real information. Thank you!
I bought 3 low end foreclosed properties for $33k from one bank and up-fitted them for $12k. I contracted with the Housing Authority for tenancy so I don’t have to chase the money like I did in the past with high-end properties. I receive $2700 monthly. Rock N Rolling
That's awesome! Foreclosures can be a great investment!
I know he touched on it a little near the end of the video, but appreciation and mortgage pay down is the icing on the cake.
Awesome breakdown Brandon :) I'm a foreign Real Estate investor from Canada. I watch every BiggerPockets podcast and have learned a lot from them. Thanks! :)
Yuse Segura Hey I live in Canada ..I am looking for a partner to invest with me ..contact Me @ diamond87@live.ca. thanks
I live in Canada too. You guys got anything going on?
That's one of the best looking hypothetical duplexes I've ever seen.
ok, moving forward, I will use this "long hand " method! Thank you! i adore Bigger Pockets!
Love the step by step process, knowledge is power. Thanks for the video.
390 X 12 = I did that calculation earlier 4680 ... is the best expression and I almost fell off from my chair lol. Thank you for making my day :)
This is great stuff, IMO this should be taught in High Schools across the U.S. A financial education is key to success, without it we have people making millions and still going broke.
100%
StirCrazy Uncle Sam doesnt want to teach you finance, because then youll realise that the 100k debt from uni is bad and they want your fucking money.
Almost all of the students would blow it off and not pay real attention. However, a handful would get interested and use this knowledge. Not everyone can be responsible and dedicated to investing. This is why about 65% of adults live paycheck to paycheck with less than 10 k in savings.
Exactly. I think it should be taught in schools worldwide including the UK where I live and invest. We’d all be better for it
The truly tenacious go online like us and learn for themselves those are the ones that earn and deserve financial success.
Thanks for the detailed number assessment. This was very helpful.
this was really good, I never knew how to find ROI until now. Thank You!!!!!
Brandon, hey thanks heaps for showing me the REAL way to evaluate a rental!
Thanks for the comment learn more from my team broker 👇👇
I make over $10,000 every month thanks to blockspace
This is so educative, i just downloaded your book ultimate rental property for beginners
Just wanted to come back to the video and book that started it all for me. Bought 10 units my first year using this book and method, and just went under contract on a 24-unit apartment building. The math is a little more complex with investors involved, but this video is a fantastic start for anyone.
Wow 👏👏👏
147 units and counting!
@@michaelmessner4720this is so inspirational! I am so happy to read this comment brother! Best of luck on your journey!!!
Repairs are the easiest- take what you think it's going to be and multiply that number by about 4.
Chunda8 I’ve heard that rule for about every investment made lol
😂
Repairs are an important part that is frequently overlooked by investors because they don't have a clue as to what they might be. Newer properties tend to be less, older properties tend to be more, unless you are a slum lord, then there aren't any repair costs.
@@RehabLife those landlords who are handy fix everything themselves
@@kirisutegomen12 Actually they spend their time on the thing they repair and time is also a preciou resource for everyone.
Really appreciate this video out of my entire time ever being on TH-cam. Best education I've received with some real "how to's" bc ppl tell you that you can do well but they never tell you HOW. THANK YOU GRACIOUSLY for this one specific video 💗💯💯🎯
You teached me thing that i never learn and i will never learn in university (financial university), congratulations brother, god bless you
3 minutes in and it's already 5 SQUARES! this is blowing my mind!
It is rectangles lol
Demon Core a rectangle is a square but a square is not a rectangle. Therefore, you just wasted everyone’s time trying to act smart
m.th-cam.com/video/5vP2X9k2bLk/w-d-xo.html
The sound of that marker on that board is sending chills down my spine...
This is the most valuable real estate investing video I've ever watched. Thank you.
Just about to dive into the real estate investing space and this video was very helpful. Thanks 👍
The four square method video was very beneficial. Thank you for posting it.
I used your method and a year later I found a perfect duplex in Texas. One year later and it did workout as a profit. Your method definitely helped when purchasing a property and getting the “Feelings” out of the way because the numbers are what matters. Thank you
I make over $10,000 every month thanks to blockspace
I just started to really learn and this site is by far my favorite! Great job
My credit score went up with Credit PatchUp LLC and when I couldn’t continue with payments they further assisted me with steps I can take myself. Those step impacted my score positively. Happy customer here!(Tina@creditpatchup.com)
@@joycdavetn6956 who cares. post messages that pertain to the video or message at hand.
Thank you Branden. I just recently found you and appreciate your material.
This is still my favorite video on how to analyze a deal .
I just wanted to thank you for the content that you provide. These breakdowns of how it works real makes it easy to understand!
Thanks for the comment learn more from my team broker 👇👇
I make over $10,000 every month thanks to blockspace
Pro-tip: When writing on a whiteboard, most of the movement is in the shoulder, even with small print. It's the opposite of pen and paper: the pad of your hand stays off the board and your wrist stays fairly still.
And i also have a horse cock .
Damn, thanks for this. Haven't realized it even after going through school
@@Spawn223311 your welcome
@David your welcome
why do people keep saying pro tip
i want to say thanks to youtube algorithm to show me this video and second i want to say thanks to you, you got a new subscriber and future real estate investor. this kind of numbers are selling by "financial coach" for a lot of money
The lease fee makes an assumption it is for a 12 month lease, so is certainly a factor on annual ROI. If you can have the tenant sign an 18 month lease or longer, it decreases expense and increases ROI.
Most markets people don't want to sign that long it seems.
@@CodyStegeman Good point. If you have a good tenant, that's happy to sign for longer, then you're in luck. I have one recovering from bankruptcy, and signed for a 2 year lease. He's happy to stay put as he's trying to rebuild his credit.
This can catch up to you if market rents increases during the 18 month term
@@maxxfeldman6244 Sure could. Where I have my properties, if it does increase, it's not going to increase more than the value saved by signing for longer. I imagine some markets have that capability, such as NYC, LA and probably a few others. For my money, I'll sign a longer lease.
Fantastic breakdown of the deal Brandon! Thank you!
Visual pictures of what you teach is much better to understand then just talking Good job
Hey Brandon. Love you BP pods!!! Wow. So how many calculators I have to use to fgure out a good house investment? Isn't $ 7,000 for a rehab very cheap when you gotta figure out EVERYTHING about the house (foundation, plumbing, electric kitchen remod & cabinets & new appliances)? That just seems verry cheap. What is recommended for a cash on cash ROI? Where's the cutting off point? Or is 9% the lowest acceptance before you check out another prop?
His numbers are pretty accurate which is why I am no longer a landloard! All the work and aggravation and if you are LUCKY you earn 10%! never again, what a nightmare! This is ten years of owning rental properties and same stories from other landlords I meet
I agree to a certain extent but it's not that bad. I have 5 Single Family Homes and it doesn't bother me much. Worst case, hire a property management firm.
And if you consider the equity and appreciation, it's way more than 10%. I put 50k down on a property earlier this year, the overall return YoY is about 16k.
I sold my first house after living in it for 5 years because I didn't wan the hassles of property management. Dumb! If I had paid a property manager his lousy 10% the tenants would have paid the mortgage and the manager and everything else and 15 years later I could have sold it for 400,000 on an original purchase price of 21.000.
Scott Stapp how did you do that?
@Scott Stapp What about PMI and the fact you have to pay principal, homeowner's insurance at the very least?
Thank you for sharing this knowledge, this video is pure gold.
I love the way you educate my man!
He is paying a premium on rehab, I know plenty of workers in the renovation business who can work for a fraction of that and give you the same quality of work. Reputation is key.
Amazing video to become one of the next millionare , iam talking about. Rich in knowledge, think wise, wisdom , intelligence , smart ,financial education is more important then just 💰
Something I invested in was vacation rentals. Double the rent in the desired season. Better than making the same every month and VRBO and trip advisor are there to make it easy.
Where abouts did you invest in .
Thank you SO much for sharing this! I've been looking for this information for quite a while and so appreciate that you posted up so straightforwardly like this! The way that you presented this is simple, understandable, and well organized!
I make over $10,000 every month thanks to blockspace
Very informative video specially for us looking to dive into rental properties. What was not discussed and is a big part of the rental property expense is the rental income will be tax as capital gain at the end of the year.
Successful people don't become that way overnight. What most people see at a glance wealth, a great career, purpose is the result of hard work and hustle over time. I pray that anyone who reads this will be successful in life
You are right, to be a successful person in life require him or her of hard work and time
The thing about been successful is working toward it and not going the other way round
You're right. Been thinking of going into gold and cryptocurrency
It's obvious everyone is going into investing cryptocurrency especially BTC
I totally agree with you it has
been an eye-opening experience for a lot of people.
Do you have any videos or information about buying the property in your own name vs establishing an LLC to buy the property?
Buying a property as an LLC can add an extra layer of protection if you end up in a lawsuit. It can also help to set up an LLC for each property that you own so they act as independent businesses.
Where it really comes in handy is if you are syndicating a deal and raising capital from others. Buying the property as the vesting LLC gives people the peace of mind that they are essentially on title for the property.
If and when you do sell, it makes it much easier to do an exchange into the next property. The one thing to be worried about is if an investor does want to cash out their shares then they have to be replaced by the remaining investors or by a new one.
One absolutely should rent as an LLC entity to isolate yourself.
All of my investment properties have their own LLC. It's a must to protect your primary home from troubles
LLC?
@@MACA_Zeon limited liability company
Thanks ...im getting a 32.5% annual return! Better than any investment out there right now that I know of. Great info.
This is where airbnb comes in! I've done over $3,000 a month on 2 bedrooms inside a property that cost much less than $200,000. Those are the type of returns I like to see in real-estate.
For what city?
Kevin Cerda Chicago
Thank you!
What does airbnb mean?
Alexander Golovin did you get that kind of return without fixing up the property n was it single family or multi? I am out of Columbus, OH and had to update n fix them up first to make about 15% cash on cash return
Thank you for the formula! I’ll use this when searching for my next investment.
How
Did you end up
Thanks you bigger pockets team!!
Some golden nuggets of information!
Thank you very much. this was very helpful since i am studying real estate rental and your lessons are priceless.
Thank you again
My account wife got most upset that you called you monthly profit your cash flow :). Thanks for the great content!
I'm a CPA. It grated me, too. Loved the video, though. Subscribing.
Is it really profit though?
My life is now complete
Good job 👍
Great video! It’s amazing how much quality content you guys are providing for free! Keep it up Brandon!
Thanks For Your Comment
Hit me up directly☝☝...
Thank you for this video, definitely helped me. I had to use 25% down for duplex in Texas. Lots of headache and stress though about tenants on how will they treat property and repairs. Either way, long term is the way to go in my opinion.
How did it turn out
@@ryanthepianoman27 it turned out good. After 2 years with rent increased, profit has gone up but definitely 10-15% of revenue for repairs. Only issue is I wish I would of bought more in 2019 lol.
I use this for my love life, rental property's and any decision that is big and small depends.
Cheers and great video.
Brandon how do you feel about renting your home on Airbnb between tenants?
It's a distraction. You cannot chase the ebbs and flows of tenant occupancy without taking your focus away from the big picture, which is to keep the house occupied long term. There's also the risk of an Airbnb customer trashing your home - more likely than a tenant who fills out a proper application and signs a real lease.
@@JTMarlin8 I hear but it does help with lowering your vacancy time
This is great!!! Thank you so much for sharing your knowledge!
Love your videos. Been a LL for 30 years! Learned a lot from you already.
Thanks for the feedback.....for more information *+1/6./1./.7../4./..6./..5./..5.../3../4../7*
W •H•A•T•S•A•P•P.••••M•E 🔅 🔅 🔅 🔅 🔅 🔅 🔅••••
Which video do you explain if peanut butter is actually the best color or not?
Very funny...
Don't you know this is all called 'The accounting formula'.
It's why the cost of living is such a mess.
Before the invention of the accounting formula a store would sell stuff cheap to get customers to buy stuff... After the invention of the accounting formula someone made it illegal to sell something for less than what was paid for it even if it would generate a huge amount of future business.... That in turn generated 'Black Friday'. Because businesses were caught in the middle of the competition.
Peanut butter is a great color.
i dont get the joke behind this comment. can sum1 explain?
@@oopalonga the peanut butter as a color reference comes from the speech given in the video. Used to show how some people focus on really strange things rather than things that truly make a difference.
When comparing the ROI of rental property to stocks don’t you have to take into account risks of the two investments. When you have all your money in one property you would have bigger risk than say having it in index funds. What do you think? I’m asking this because I have most of my assets in one rental property and I would like to know if it makes sense to sell it and invest somewhere else.
Im in the same boat as you. Plus I sold my last rental and used the equity for the next rental. My cash on Cash ROI square doesnt look good but my Cash flow square is double the example in this video.
You change lives, Brandon. Thank you!
BOOM!! Amazing Break down !
Glad you found this useful, Frank! We appreciate the feedback.
@@biggerpockets one of the best explanations I've heard!
This was most definitely a great presentation Thanks again Brandon you are Dope
Thanks for the comment learn more from my team broker 👇👇
Thank you, I have been looking for someone who will break down the numbers for me. You have met my need 🙂
Question: (Assuming one has several properties simultaneously) Should the CapEx be limited for use, or do all the CapEx funds (from various properties) go into a general pool that you can pull from when one property is in need? And for the repair months expense fee?
Lastly, thank you for this video/resource platform! I truly learned a lot.
Depends how you bought the properties. If they are different owners like LLCs or names, they would most likely be independent of each other.
What you can do is have the CapEx be taken out from the cash flow so you never actually put your own money into the property. Obviously this has to be done after a year or 2 once you have enough cash flow to cover your capex
I make over $10,000 every month thanks to blockspace
When you buy, each deal has to carry itself.
There is major factor that he missed when calculating the Annual Cash on Cash ROI. What about the portion of the mortgage payment that is being allocated to the principle. Paying down your principal means you are lowering your debt and increasing your equity. That is definitely a GAIN in my book that should NOT be overlooked when doing your numbers. Lets say you pay off about $3,000 of your principal in year one (which only gets higher in future years), calculate that with the $50,000 invested gives you another 6% ROI. Its's not cash in hand but it is $3,000 in equity, which is like money in the bank. With my calculation, the ROI would go from his 9.3%(cash on cash) + 6%(equity) = 15.3% overall ANNUAL ROI. Obviously the numbers that he is using are a little off for a project that only needed a $7K reno, but leaving that aside and just focusing on the calculation for your ANNUAL ROI, don't forget to take into account the new equity you gain every year. It might make the difference in taking a deal or not.
This is a cash flow so it's determining how much cash will you have available at the end of each month.
A mortgage is a fixed amout each month so whether the payment is allocated to interest expense or towards the principal, the cash out amount doesn't change until the mortgage is paid off.
@@annasaricicek8771 Or you sell the property. Which I guess is more likely to happen before the mortgage is paid off. In that case, you have to take that additional 6% into account as well.
Cash on Cash ROI is a great tool to utilize when one has a mortgage on the property. I used it and this 4 square method on the first property I invested in with a partner. If one is able to pay cash for a house, I wonder how the cash on cash ROI would change things, because it wouldn't look good in that square. I guess thats where the overall or internal rate of return becomes more important.
I have been searching for months for a video like this, you just got a subscriber. Love your other videos.
You're amazing! Personality and analysis! Brandon Brand.
Biggerpockets, how do you determine what a property rents for? In your example you used a duplex and assumed they rented for $1000 each. But is there a standardized method for determining the actual rent price on a house, duplex, or otherwise?
my method would be the total cost divided by the months of years say you paid 57000 for the property and the term you have for your renter is 5 years so that would be 57000÷60months which is 950and thats how much it will have to be a month in order to get your money back
Skiidzman gotta check the rents in the surrounding area for similar homes
Jumpman Plug
Is that the down payment 57k or the total price of property?
i compare what similar homes rent around the area, also the quality of the home, is it remodeled or is it dated after that research is done i list for 50 to 100 more on my estimate and if someone ask me to lower rent there is room for negotiations
Rent has nothing to do with what you paid. Its all about the rent market in your particular area. In larger cities, rent can change daily based on the going price people are willing to pay and of course supply and demand.
Great summary! Also remember taxes are based on actual income plus principle not saved-up-for-expenses.