I initially started my investment journey with the guidance of an investment advisor named Regina Louise Collaro,S she's widely recognized for her expertise so you might have come across her name. Her transparent approach granted me full control of my investments, and her fees are reasonable, considering my return on investment.Now, I benefit from her income strategies every month.Nonetheless, it's crucial to conduct thorough research before engaging with any investment advisor.
That’s great , your investment advisor must be really good,I have seen testimonies of people using the help of investment advisors in making them more financial stable. Do you mind sharing more info on this person?
Regina Louise Collaro is based in the United States and can work with anybody wherever they stay. If you would like more information on reaching her, you can conduct a search online.
Personally, I'm blessed and realizing I'm not the only one working with Regina Louise Collaro. I will consider myself lucky. I've been able to feed and make a living through her advice and great work. For such a person as Regina, I owe her gratitude, support and endless prayers as it is not easy to gain access to such a competent and reliable adviser. Who isn't just wise but has all it takes to handle an investment and is good at what she does
Rental properties can get away with a lot less. For cosmetic rehab, which is what it sounded like, you could have put in half the amount and still commanded market rents. Understanding comps and ARV, helps give you the option to flip, not just refinance.
Yeah of course, it took a lot of work to get where I am and I made some mistakes so I want to guide people to not make the same mistakes I did. We can all work together
@@brandonlopez2966 so I just did this without trying to do the bee method… I just opened escrow today for my second property but I’m now doing a hard money loan and trying the “brrrr” method this time by putting 20’ percent down and the lender giving me $100k back to rehab ! So god willing it goes good. On my first property I put down 62k on congenital loan and then with my own money rehabbed the properties I ended up spending like $110k so that’s y now I’m trying to do the brrr method wish me luck
Hey Brandon, seeing this video a year after it was made, but thank-you for your honest story on the BRRR method and what you learned + wished you had done differently. I am hoping to try this method at some point and this was very helpful too see what can go wrong and things to look out for. Also great to hear the deal is still cash-flowing and was a strong ROI investment. The thing that is alluring to the BRRR method is saving money once, buying in cash (if you can), and pulling that money out for the next deal and so forth, so can't wait to cautiously start, thanks again!
So grateful I came across your video. Preparing to do my first BRRR, so nice to know about front-end comps research before buying and the amount of equity needed to refi. Much appreciated, Brandon!
Great video thank you for sharing your experience. What a learning experience! It helps me better understand the BRRRR method and what to do for my next deal. Thank you!
Glad you found some value out of the video. Always remember to extensively research your comps prior to buying a property with the intention of using this method
Comps are very important to look at before buying. I also look at the cost of rent in the area I am looking to buy as well. You need comps for rent and property value. I think anyways it wouldnt hurt to check. Great video by the way, letting other potential investors know some of the details that go into property investing. This is one of the more important ones, theyre all important
Thanks for the video! Just a note Cashflow is not everything the property makes after the mortgage payment, Cashflow is after all expenses as well, insurance, property management fee, maintenance savings, vancancy savings, capex, annual taxes, water or whatever landlord pays above mortgage, after all that is factored in, Cashflow is that number of the monthly profit of a property after all those things. It’s actually what the landlord is making profit on a monthly bases. Just so others can see. BiggerPockets has great vids in this. Again great video and thanks for it mate!
you should have done a DSCR loan where the bank just base on the rent value and dont need to look at the appraisal value. Because you are cash flowing a good bit it should be an easy qualify.
Thank you for sharing your mistake and allowing us to learn from it! The renovation looks great and at least your still in the black from rental income
As an appraiser and broker I think this really helps me to do good BRRRR deals , I still leave some money in my deals but I have a good idea of where they will appraise after they’re fixed up I bought a house for $65k put in $40k and it appraised for $215,000. I was able to get a loan for $171,000 and still cash flow a little each month as the rent is $1350 and the payment is $1105 Not every deal goes like this though lol
Wow that's awesome, you got to fix This place up and still walk away with a little under $70k in your pocket. Now you have a appreciation asset that is cash flowing on a monthly basis. Good job
I just backed out on a quadplex deal in Huntington WV. Fsbo property for 50k$. Contractor estimates 300k$ Renovation which is a total renovation even moving boards around to create 2 bed 1 bath units in each. Comps however did not support this deal. There are only two quads to compare and neither one has been renovated that had sold in last two years. One sold for 250k, the other for around 300k. I was going to find this deal with private money lender who was going to loan me 325k. In order to pay him back I needed the home to appraise for 435k to get 75% loan to value to pay back my private money lender his 325k initial investment to me. It wouldn’t have worked. It would have cash flowed but I would have owed my lender around 106k because the home after Reno probably wouldn’t have appraised for more than 325k in my best educated guess
I understand the decision you made to back out of the deal, but would the house have cash flowed very well? Also, were you going to be hand on with the renovation or just contract everything out? The deal is definitely doable with those kind of comps and the purchase price being 50k. You could ever get the property under contract for $50k and try to sell the contract to someone else for $75k
It's a rental, I wouldn't have done the renovation as nicely as you did. To your ultimate conclusion, yes, you should have looked at the future renovation costs vs the possible neighborhood value. Whether is will be your own residence, or a rental, try not to have the most expensive house in the neighborhood. But you now do have a nice duplex which is bringing in a good income.I'd say you're doing better than the stock market and better that all cash, in the current economy. The duplex will still rise in value, and you have a positive cash flow, so rest assured that it's a good investment overall.
Comps are so important thanks for sharing your experience on this brrrr investment hopefully your still getting good cash flow from it for years to come
If you're locked into a zip code, sometimes you have to be your own comps. If you own a few buildings in certain location, you may need to sell a renovated deal to create at least one comp to help you refinance your other deals.
@@brandonlopez2966 Yep. I'm a 5+ unit apartment broker and investor. You can drive value above your neighboring comps in a manner unavailable to the 2-4 market. Your price per unit is lower as well. Sometimes a 5 unit right next door to a 4 unit sells for the same price. 5+ is where you can truly drive value with new rents and renovations.
One tip for you. Walk with the appraiser and subtly mention how much you are hoping the house is appraised for or how much you plan to borrow. They’ll probably not respond to it but at the end of the day they don’t want to be the reason a loan doesn’t go through. And if it’s a difference of like 20k they’ll probably make sure it lands where it needs to. Obviously the number has to be in the right ballpark. During a regular purchase the appraiser knows the purchase price. During a refinance they do not. So it doesn’t hurt to drop a hunt 😉
this is hardly a fail - not every property is the right fit for this. 14% cash on cash is a great return. Do you have a guess on how much you saved by doing the work yourself? was it worth your time?
Great information. Thank you so much. I’m in the buying, rehab stage. The renter is waiting and I am trying to stay within a budget so I can refinance.
I owe 122k for a property profiting about 1700 a month from this property. I recently renovated this property and comps are 400k+. I want to try the brrr method but I'm a little scared because I want to keep this property because it holds sentimental value with me. I can renovate the basement and get another thousand a month from it. Total profit with be about 2700 a month. But if refinance under my llc my monthly payments will go to 2600 a month minus the insurance and taxes.
Amazing video brother! There’s bigger mistakes that could have happened but you minimized them forsure. This is what creates solid investors. Mistakes in this business are inevitable.
That’s the real tricky part of trying to do financing on any duplex that is a bit of an anomaly type area.. meaning no real comps to compare to. I think that’s what really hurt the ARV there. Had there been a condominium near by or other multi family… you probably would have gotten what you aimed for. Financing multifamily in general is a step up challenge from a typical single family. But huge props to you for taking massive action and great cash flow!
So you paid 64839,48 dollars to renovate the house. That brings in an extra 1170 dollars monthly. This means it will take about 55 months to break even. After that period you'll make an extra 1170 monthly until the next renovation.
Hey Brandon, now they you have learned thing and went through it. What has change in your business plan and things you would do differently now... type of loans, research, budget or anything that you now know to do that you didn't?
A big thing that I have learned along the way is the DSCR loan which can fund properties based on their ability to cashflow and make money. I have not used this strategy yet but plan on it in the near future. The other big thing is to make sure you look at comps in the area prior to renovating. The key is to not over renovate so you don't have more into the property than it is worth
*SUSBCRIBED for an honest and brave review delivered in an easy and straight forward way. Good voice tone that is easy on the ears. no fake passion no screaming no hype. Keep up the good work.*
Great video, finally someone who telling us the truth, I hope you get your money back soon, but don’t worry you still get in cash flow,keep the property and refinance in about 2 years, and work with hard money lender 👍
Baseboard heat is fine. New windows doesn’t bring in additional rent. $120,000 in renovations!?!?! That’s a lot of money! What city are you?? Because Seattle is strong strong market
Thanks for the honesty and transparency! Really appreciated! Which area was that the house you purchased, in which year and how much does it cost today?
@@brandonlopez2966 can we start investing in real estate without a team and without any mentor ? What are the things to be mentally prepared before investing in R.E properties for beginners?
Totally get where you are coming from, but I did put quality cabinets, countertops, appliances, and flooring that will hold up better than the cheaper items and I will not need to worry about this property for a very very very long time
Awesome video thank you for this! It's nice to see that even with so many things going wrong on the refinance side you were still able to cash flow the duplex and make the deal work in your favor!
Thx for sharing, and getting nice rents. I admire your hard work in this property. It is critical to do all due diligence from beginning to the end - comps, rent comps, home inspection, rehab cost, refi prior to buy. I am looking for out of state cheaper properties (than CA) for BRRRR, for rental, and airbnb. Hopefully that will less risk since I am over 60 yrs old, and my wife will k$@ me if I screw up. Also want to generate cash doing wholesale and other RE services. Keep sharing real stuff. The next RE downturn will make action takers very wealthy in a few years. Sadly I could have bought more homes in 2008 in CA, self to blame. Is there such a thing as no point / cash closing for refi?
I couldn't agree any more. When I attempted my refi I saw that I would be able to pull out 60k but they wanted to charge around 10k in closing cost fees. Ontop of that, my current interest rate is 3.75%, and my new rate would jump up to 6%. I just measured the pros and cons and I made the decision to just not refi and keep my payment the way they are
@@brandonlopez2966 Yeap, right decision. Are you continue to do more BRRR in this market? What is your area? Keep sharing more updates on your RE investment.
Great video man! I am going through this exact situation right now. I ended up overspending on the rehab so my only option now is to sell, unless i decide to keep it without refinancing, and rent it.
You got this! It sucks over renovating and not realizing until it's done, but I would hold on to it and take advantage of the cash flow and let appreciation do it's thing over time
Awesome video man! Looking to do this in the future and it was super insightful to hear you. Still a great investment and don't take that "appraisal" with too much thought, in my experience, you can have three different appraisers go in and get three different numbers. They would much rather give you a range than a flat out number if you could.
Good information! I recently became a realtor sold my own house trying to figure out the best way to invest 180k but with the market the way it is and me being in south florida the intrest rates ontop of HOAs and overall price just dont make sense for anything ): so I feel like this is going to be a waiting game for a little bit to see how the market goes.
Ive been told by my buddy who has been doing this for a while and has many properties he isnt buying anything until next year. This is an election year, everything is in shambles right now and over priced. Wait it out and save like brandon said itll be worth the wait and more security when you jump in the fire.
@@stephaniewalsh7008 Thats the issue I think when election comes up and due to democratic party being in shambles knowing there going to lose there probably going to leave a shit storm for next guy(hopefully republican). So on one hand this could be the BEST time to buy if shit gets worse over next few years.
We just did our first BRRRR and the one surprise that caught us was that our bank would cash out refi 80% of the value of the home OR 80% of the cost we had into the home, whichever is LOWER. We were able to work it out with the bank, but that was a gut-check when we went to refi.
Hello Brandon. Just wondering how are you planning or if you are planning to get money out in the future. I am in a similar situation. Good cashflow, but the change in the market made BRRRR not possible. I was thinking about a HELOC. Other than that wait until market changes. Any other strategies you know of?
That's pretty much the only strategies I am aware of. HELOC isn't the worst idea since you probably have a good interest rate on that property now that you don't want to lose. But end of the day the cashflow coming in is probably the safer bet. With current interest rates I refuse to refinance
You failed the brrr but overall it’s a great investment. Could you have put half of what you did into renovating it? Possibly get used kitchen appliances?
Definitely could have shaved some spending by getting used appliances but overall I'm happy with the decisions. The appliances came with warranties so if anything happens I should be good. Biggest unexpected expense was having to re-wire the kitchen since the wires were too short to stub into the framing once I knocked out the soffit
Comps stands for comparable. When trying to obtain the properties value the appraisers in the United States compare the value of your home to a home that has sold recently that is similar to your home. So they find the best comparable house to then give your house a opinion of value
Why would you keep cash flow positive by that much and not remortgage with a shorter term so you’re not taxed on extra income? I realize write offs with interest, property tax etc can reduce tax paid but curious…to me it makes sense to remortgage at a term length that matches the income from the property, so I don’t have a bigger hit at tax season?!? I’ve also not yet pulled the trigger on a property 😂😂 so what the hell do I know? That’s why I’m asking I guess 😊
Hahah all good. I have a hard time pulling the trigger on a refinance since I have under a 4% interest rate and the current rate for investment properties are in the 7%. Also, the banks require a 70% LTV for refinanced investment properties, and I wouldn't be able to take out too much money but my payments would be increased drastically. So I'm chilling with my $1,800 a month cashflow off this property lol
I think your cashflow estimate is a bit off...I assume you pay taxes, insurance, have to account for maintenance and vacancy? Thank you for sharing your experience. Did it take you longer than it would have just hiring a contractor? I learned that lesson the hard way.
Well taxes and insurance are factored into my monthly loan payment from my loan servicer. It's right around $1,000 a month including PITI. I don't really have to factor in for maintenance due to me just renovating the entire building so I should be issue free for at least a few years. Definitely took me a little longer doing it myself but I saved some money so so worth it
How are you paying a mortgage of less than 1000 dollars for a house that's 226k.... are you including taxes and insurance....are you paying a 1% interst rate...something doesn't add up.
Yes the price includes taxes and insurance. I paid $226k for the house and put 25% down. So I financed around $170,000. Now I got this loan on 2020 when the interest rates were amazing. I believe my interest rate is right below 4%. So including taxes and insurance my monthly payment is below $1,000 a month and I bring in $2,850 a month on that property now
A little confused by this question. I got a 30 yr loan on the house originally. So I am just sticking with that original 30 year loan at a low interest rate
not wrong about that at all. It takes money to make money, and in my case it took a shit ton of money. I could have cut corners and renovated each unit for 25k, but then i wouldn't have updated the old plumbing and electrical work
When buying a duplex for an investment property they require 25% down. When refinancing they require you to have 30% equity based on the appraised value
@@brandonlopez2966 assuming that you have a full time job. have you thought of putting all of the rent money back into the principal. You would probably pay the property off in 6/7 years if you do that. Thats what we do. We put 100% of our rent plus additional $500 a month into our 3 rentals and will have them paid off in 6 years. We have full time jobs as well which allow us to pay the extra $500 per property and still save up when another opportunity comes up.
We (myself and my contractor) were in the attic on a heavy rain day. While we were up there we saw water leaking in through the side, and some minor leaks in various places (just drips). That's when we decided to pull the gun. Also, a lot of the plywood was damp. I did have an inspection prior to closing and they mentioned that the roof may need a little repair. So they ended up crediting my $2,000 for this that was paid out to me in closing. So I thought I was just going to need to repair the roof, which I definitely couldn't done, but it made much more sense to just go in and replace the entire roof while I was there renovating the entire place
Hey Mark,I'm exploring different investment opportunities and would appreciate more insights on how you invest
I initially started my investment journey with the guidance of an investment advisor named Regina Louise Collaro,S
she's widely recognized for her expertise so you might have come across her name. Her transparent approach granted me full control of my investments, and her fees are reasonable, considering my return on investment.Now, I benefit from her income strategies every month.Nonetheless, it's crucial to conduct thorough research before engaging with any investment advisor.
That’s great , your investment advisor must be really good,I have seen testimonies of people using the help of investment advisors in making them more financial stable. Do you mind sharing more info on this person?
Regina Louise Collaro is based in the United States and can work with anybody wherever they stay. If you would like more information on reaching her, you can conduct a search online.
Personally, I'm blessed and realizing I'm not the only one working with Regina Louise Collaro. I will consider myself lucky. I've been able to feed and make a living through her advice and great work. For such a person as Regina, I owe her gratitude, support and endless prayers as it is not easy to gain access to such a competent and reliable adviser. Who isn't just wise but has all it takes to handle an investment and is good at what she does
Rental properties can get away with a lot less. For cosmetic rehab, which is what it sounded like, you could have put in half the amount and still commanded market rents. Understanding comps and ARV, helps give you the option to flip, not just refinance.
Thanks for being honest and not trying to flex or anything appreciate the honesty and transparency
Yeah of course, it took a lot of work to get where I am and I made some mistakes so I want to guide people to not make the same mistakes I did. We can all work together
Yes thank you
@@brandonlopez2966 so I just did this without trying to do the bee method… I just opened escrow today for my second property but I’m now doing a hard money loan and trying the “brrrr” method this time by putting 20’ percent down and the lender giving me $100k back to rehab ! So god willing it goes good. On my first property I put down 62k on congenital loan and then with my own money rehabbed the properties I ended up spending like $110k so that’s y now I’m trying to do the brrr method wish me luck
@@hectorsolis7128 come back and report thanks
I second that. Thank you for the honest video 🙏
Great story. We need more people to share their experiences!
I'm sure the home will appreciate in years to come, it's beautiful. Good luck to you
Thank you
Dang thanks for sharing! Getting ready to do my first BRRR on the third property I own.
Thank you for your experience. I’m glad you are still being optimistic about it
Hey Brandon, seeing this video a year after it was made, but thank-you for your honest story on the BRRR method and what you learned + wished you had done differently. I am hoping to try this method at some point and this was very helpful too see what can go wrong and things to look out for. Also great to hear the deal is still cash-flowing and was a strong ROI investment. The thing that is alluring to the BRRR method is saving money once, buying in cash (if you can), and pulling that money out for the next deal and so forth, so can't wait to cautiously start, thanks again!
Thanks for sharing this. Comps are very very important.
Appreciate the honesty! Good luck on your next one!
Thank you!!!
Thank You for sharing with us to always analyze a deal.
Your honesty matters so much. Don't five up. Your next one is gonna be a hit for sure. You have helped everyone elwho sees this.
Happy I made this vidoe
Video*
So grateful I came across your video. Preparing to do my first BRRR, so nice to know about front-end comps research before buying and the amount of equity needed to refi. Much appreciated, Brandon!
Thanks for the positive review
I respect the transparency, may fortune flow your way
I'll make sure not to make the same mistake. Thank you for sharing your experience!
Thank you for being so honest and teaching us
Always!
Great video thank you for sharing your experience. What a learning experience! It helps me better understand the BRRRR method and what to do for my next deal. Thank you!
Glad you found some value out of the video. Always remember to extensively research your comps prior to buying a property with the intention of using this method
Thank you for being transparent
Of course
Comps are very important to look at before buying. I also look at the cost of rent in the area I am looking to buy as well. You need comps for rent and property value. I think anyways it wouldnt hurt to check. Great video by the way, letting other potential investors know some of the details that go into property investing. This is one of the more important ones, theyre all important
Thanks for the video! Just a note Cashflow is not everything the property makes after the mortgage payment, Cashflow is after all expenses as well, insurance, property management fee, maintenance savings, vancancy savings, capex, annual taxes, water or whatever landlord pays above mortgage, after all that is factored in, Cashflow is that number of the monthly profit of a property after all those things. It’s actually what the landlord is making profit on a monthly bases. Just so others can see. BiggerPockets has great vids in this. Again great video and thanks for it mate!
Thank you. You don't know how highly valuable is your vidéo. Love you bro
Really love the positive feedback, thanks for watching the video ?
you should have done a DSCR loan where the bank just base on the rent value and dont need to look at the appraisal value. Because you are cash flowing a good bit it should be an easy qualify.
You have a good point. I didn't know about DSCR loans at the time. Alll about learning in the real estate game
Thank you for sharing your mistake and allowing us to learn from it! The renovation looks great and at least your still in the black from rental income
Great job on the property purchase and investment. Thank you for sharing your experience.
As an appraiser and broker I think this really helps me to do good BRRRR deals , I still leave some money in my deals but I have a good idea of where they will appraise after they’re fixed up
I bought a house for $65k put in $40k and it appraised for $215,000. I was able to get a loan for $171,000 and still cash flow a little each month as the rent is $1350 and the payment is $1105
Not every deal goes like this though lol
was the 65k all cash for the property?
Wow that's awesome, you got to fix This place up and still walk away with a little under $70k in your pocket. Now you have a appreciation asset that is cash flowing on a monthly basis. Good job
@brandonlopez2966 i thought his new loan was $171. What 70k are you referring to?
@@NightWolf-vv5mehe put in a 100k an got a 170k loan
I just backed out on a quadplex deal in Huntington WV. Fsbo property for 50k$. Contractor estimates 300k$ Renovation which is a total renovation even moving boards around to create 2 bed 1 bath units in each. Comps however did not support this deal.
There are only two quads to compare and neither one has been renovated that had sold in last two years. One sold for 250k, the other for around 300k.
I was going to find this deal with private money lender who was going to loan me 325k. In order to pay him back I needed the home to appraise for 435k to get 75% loan to value to pay back my private money lender his 325k initial investment to me.
It wouldn’t have worked.
It would have cash flowed but I would have owed my lender around 106k because the home after Reno probably wouldn’t have appraised for more than 325k in my best educated guess
I understand the decision you made to back out of the deal, but would the house have cash flowed very well? Also, were you going to be hand on with the renovation or just contract everything out? The deal is definitely doable with those kind of comps and the purchase price being 50k. You could ever get the property under contract for $50k and try to sell the contract to someone else for $75k
It's a rental, I wouldn't have done the renovation as nicely as you did. To your ultimate conclusion, yes, you should have looked at the future renovation costs vs the possible neighborhood value. Whether is will be your own residence, or a rental, try not to have the most expensive house in the neighborhood. But you now do have a nice duplex which is bringing in a good income.I'd say you're doing better than the stock market and better that all cash, in the current economy. The duplex will still rise in value, and you have a positive cash flow, so rest assured that it's a good investment overall.
All facts there sir, I probably wouldn't change much if I had to go back in time and do it again
Comps are so important thanks for sharing your experience on this brrrr investment hopefully your still getting good cash flow from it for years to come
Anytime, still getting some amazing cashflow so can't go wrong with that
Thank you for this Brandon ❤️
No problem
Appreciate the honesty and despite the money "loss'; lessons gained are priceless.
If you're locked into a zip code, sometimes you have to be your own comps. If you own a few buildings in certain location, you may need to sell a renovated deal to create at least one comp to help you refinance your other deals.
thats totally something i have thought of before
@@brandonlopez2966 Yep. I'm a 5+ unit apartment broker and investor. You can drive value above your neighboring comps in a manner unavailable to the 2-4 market. Your price per unit is lower as well. Sometimes a 5 unit right next door to a 4 unit sells for the same price. 5+ is where you can truly drive value with new rents and renovations.
This is good info! Luckily You can always refinance later. Though your money will be tied up
Wish we had more videos like this online with lessoned learned. Love the info! Thanks
More to come!
that duplex is killing it
I’d say it’s a win based on your cash flow. 13-14% ROI is really good. It takes about 7 to 8 years to see that back.
Good point
Thanks for the video
Of course
One tip for you. Walk with the appraiser and subtly mention how much you are hoping the house is appraised for or how much you plan to borrow. They’ll probably not respond to it but at the end of the day they don’t want to be the reason a loan doesn’t go through. And if it’s a difference of like 20k they’ll probably make sure it lands where it needs to. Obviously the number has to be in the right ballpark.
During a regular purchase the appraiser knows the purchase price. During a refinance they do not. So it doesn’t hurt to drop a hunt 😉
Great advice, I actually did walk with the appraiser during our inspection but my number was much much much further away than their number haha
this is hardly a fail - not every property is the right fit for this. 14% cash on cash is a great return. Do you have a guess on how much you saved by doing the work yourself? was it worth your time?
Great information. Thank you so much. I’m in the buying, rehab stage. The renter is waiting and I am trying to stay within a budget so I can refinance.
Thanks for your transparency. This is good information.
Glad it was helpful!
I owe 122k for a property profiting about 1700 a month from this property. I recently renovated this property and comps are 400k+. I want to try the brrr method but I'm a little scared because I want to keep this property because it holds sentimental value with me. I can renovate the basement and get another thousand a month from it. Total profit with be about 2700 a month. But if refinance under my llc my monthly payments will go to 2600 a month minus the insurance and taxes.
Thank you for sharing, great advice
Amazing video brother! There’s bigger mistakes that could have happened but you minimized them forsure. This is what creates solid investors. Mistakes in this business are inevitable.
Very true and I learned a very valuable lesson early on from this
That’s the real tricky part of trying to do financing on any duplex that is a bit of an anomaly type area.. meaning no real comps to compare to. I think that’s what really hurt the ARV there. Had there been a condominium near by or other multi family… you probably would have gotten what you aimed for. Financing multifamily in general is a step up challenge from a typical single family. But huge props to you for taking massive action and great cash flow!
Thanks man, that was my huge issue. My market doesn't have very many duplexes anymore so there was not much to compare it too
Nice! Thank you for your honest feedback! Thumbs up from me.
No problem 👍
So you paid 64839,48 dollars to renovate the house. That brings in an extra 1170 dollars monthly. This means it will take about 55 months to break even. After that period you'll make an extra 1170 monthly until the next renovation.
This is super useful thank you for sharing!
Glad it was helpful!
Hey Brandon, now they you have learned thing and went through it. What has change in your business plan and things you would do differently now... type of loans, research, budget or anything that you now know to do that you didn't?
A big thing that I have learned along the way is the DSCR loan which can fund properties based on their ability to cashflow and make money. I have not used this strategy yet but plan on it in the near future. The other big thing is to make sure you look at comps in the area prior to renovating. The key is to not over renovate so you don't have more into the property than it is worth
Thank you for sharing your experience
great video with great information! most other youtubers don't explain the fails or downfalls, only the successes
Thank you
*SUSBCRIBED for an honest and brave review delivered in an easy and straight forward way. Good voice tone that is easy on the ears. no fake passion no screaming no hype. Keep up the good work.*
You still got a nice cash flow at least I would of keep the property honestly !
Oh yeah, I'm just chilling with the cashflow
Very informative video thank you!
Glad it was helpful!
Thank you
You're welcome
Thanks for the honesty
Any time!
Great video, finally someone who telling us the truth, I hope you get your money back soon, but don’t worry you still get in cash flow,keep the property and refinance in about 2 years, and work with hard money lender 👍
Thanks for sharing and being transparent with the lessons learned! May i ask what cities you are investing?
Absolutely, I mainly invest in my hometown. Which is Virginia Beach, VA
Baseboard heat is fine. New windows doesn’t bring in additional rent. $120,000 in renovations!?!?! That’s a lot of money! What city are you?? Because Seattle is strong strong market
Appreciate for the information
Anytime
Thanks for the honesty and transparency!
Really appreciated!
Which area was that the house you purchased, in which year and how much does it cost today?
I purchased is where I live in Virginia for $226k. It's now worth around $350k
@@brandonlopez2966 can we start investing in real estate without a team and without any mentor ?
What are the things to be mentally prepared before investing in R.E properties for beginners?
thanks bro
Thank you sir for the video
Great content bro!! Thanks!
Glad you liked it!
Thank you so much for sharing, I didn't know that this could happen and I wish you nothing but the best :)
You are so welcome
Your first mistake was over renovating. You should’ve did the most basic upgrades instead of going “luxury” in lower class neighborhood
Totally get where you are coming from, but I did put quality cabinets, countertops, appliances, and flooring that will hold up better than the cheaper items and I will not need to worry about this property for a very very very long time
Thank you,that's a great video and a great advice. Hope your next property will work out better
Awesome video thank you for this! It's nice to see that even with so many things going wrong on the refinance side you were still able to cash flow the duplex and make the deal work in your favor!
Thanks for the feedback, I'm very thankful that this deal still went good with all the issues I had
not really a fail. it’s just the refinance didnt work at this time. keep holding it by renting the units and have faith that rate will drop
You can probably find a credit union that willlet you refi up to 90% out
Yeah it is harder on investment properties. Even credit unions want at least 25% equity
Thanks for sharing!
Thanks for sharing
Thanks.
Thx for sharing, and getting nice rents. I admire your hard work in this property.
It is critical to do all due diligence from beginning to the end - comps, rent comps, home inspection, rehab cost, refi prior to buy.
I am looking for out of state cheaper properties (than CA) for BRRRR, for rental, and airbnb. Hopefully that will less risk since I am over 60 yrs old, and my wife will k$@ me if I screw up.
Also want to generate cash doing wholesale and other RE services.
Keep sharing real stuff.
The next RE downturn will make action takers very wealthy in a few years. Sadly I could have bought more homes in 2008 in CA, self to blame.
Is there such a thing as no point / cash closing for refi?
I couldn't agree any more. When I attempted my refi I saw that I would be able to pull out 60k but they wanted to charge around 10k in closing cost fees. Ontop of that, my current interest rate is 3.75%, and my new rate would jump up to 6%. I just measured the pros and cons and I made the decision to just not refi and keep my payment the way they are
@@brandonlopez2966 Yeap, right decision. Are you continue to do more BRRR in this market?
What is your area?
Keep sharing more updates on your RE investment.
Yes I am purchasing more. I am in the Virginia, looking at properties in Virginia Beach and Norfolk
@@brandonlopez2966 Very nice!! I am SO CAL, not easy to do it here so have to go out of state for my first deal hopefully.
Out of state must be hard and scary. The ROI in my area is pretty good so thankfully I can invest in my own backyard
Great tip!
Yea that sucks, just keep it and enjoy that cash flow.
That's the gameplan for now
So if i was to buy a house or duplex don't revonate it for more then what they're selling for in the market ? Stuck between a 300k home or 430k duplex
Get the duplex and don't over renovate. If you buy the house for $300k and the ARV is $350k, don't put more than $50k into the property
How do you check the prices of the houses that’s surrounding the investment property?
Great video man! I am going through this exact situation right now. I ended up overspending on the rehab so my only option now is to sell, unless i decide to keep it without refinancing, and rent it.
You got this! It sucks over renovating and not realizing until it's done, but I would hold on to it and take advantage of the cash flow and let appreciation do it's thing over time
Did you do all the renovation work yourself? That’s very impressive. Good work.
Yeah I did most of the work myself and with help from friends. The whole thing was a learning process
@@brandonlopez2966 what was it like putting up drywall and shingling a roof for the first time? was it physically miserable? lol
Awesome video man! Looking to do this in the future and it was super insightful to hear you. Still a great investment and don't take that "appraisal" with too much thought, in my experience, you can have three different appraisers go in and get three different numbers. They would much rather give you a range than a flat out number if you could.
you're very right about that. Appraisers can be a pain
Good information! I recently became a realtor sold my own house trying to figure out the best way to invest 180k but with the market the way it is and me being in south florida the intrest rates ontop of HOAs and overall price just dont make sense for anything ): so I feel like this is going to be a waiting game for a little bit to see how the market goes.
Doesn't hurt to wait and stack up cash. Then when the right opportunity comes along you can jump on it
Ive been told by my buddy who has been doing this for a while and has many properties he isnt buying anything until next year. This is an election year, everything is in shambles right now and over priced. Wait it out and save like brandon said itll be worth the wait and more security when you jump in the fire.
@@stephaniewalsh7008 Thats the issue I think when election comes up and due to democratic party being in shambles knowing there going to lose there probably going to leave a shit storm for next guy(hopefully republican). So on one hand this could be the BEST time to buy if shit gets worse over next few years.
We just did our first BRRRR and the one surprise that caught us was that our bank would cash out refi 80% of the value of the home OR 80% of the cost we had into the home, whichever is LOWER. We were able to work it out with the bank, but that was a gut-check when we went to refi.
I totally get it. My biggest lesson was to really look at my comps in the area for value after it's improved
Hello Brandon. Just wondering how are you planning or if you are planning to get money out in the future. I am in a similar situation. Good cashflow, but the change in the market made BRRRR not possible. I was thinking about a HELOC. Other than that wait until market changes. Any other strategies you know of?
That's pretty much the only strategies I am aware of. HELOC isn't the worst idea since you probably have a good interest rate on that property now that you don't want to lose. But end of the day the cashflow coming in is probably the safer bet. With current interest rates I refuse to refinance
You failed the brrr but overall it’s a great investment. Could you have put half of what you did into renovating it? Possibly get used kitchen appliances?
Definitely could have shaved some spending by getting used appliances but overall I'm happy with the decisions. The appliances came with warranties so if anything happens I should be good. Biggest unexpected expense was having to re-wire the kitchen since the wires were too short to stub into the framing once I knocked out the soffit
what is 'comps'? im from the UK and dont know this word....
Comps stands for comparable. When trying to obtain the properties value the appraisers in the United States compare the value of your home to a home that has sold recently that is similar to your home. So they find the best comparable house to then give your house a opinion of value
So he probably raised the rent, and both tenants left, and renovated. Its so bad for the poor, older cheap units are getting less and less.
Why would you keep cash flow positive by that much and not remortgage with a shorter term so you’re not taxed on extra income? I realize write offs with interest, property tax etc can reduce tax paid but curious…to me it makes sense to remortgage at a term length that matches the income from the property, so I don’t have a bigger hit at tax season?!?
I’ve also not yet pulled the trigger on a property 😂😂 so what the hell do I know? That’s why I’m asking I guess 😊
Hahah all good. I have a hard time pulling the trigger on a refinance since I have under a 4% interest rate and the current rate for investment properties are in the 7%. Also, the banks require a 70% LTV for refinanced investment properties, and I wouldn't be able to take out too much money but my payments would be increased drastically. So I'm chilling with my $1,800 a month cashflow off this property lol
Biggest lesson here; never SPECULATE!!!
I think your cashflow estimate is a bit off...I assume you pay taxes, insurance, have to account for maintenance and vacancy? Thank you for sharing your experience. Did it take you longer than it would have just hiring a contractor? I learned that lesson the hard way.
Well taxes and insurance are factored into my monthly loan payment from my loan servicer. It's right around $1,000 a month including PITI. I don't really have to factor in for maintenance due to me just renovating the entire building so I should be issue free for at least a few years. Definitely took me a little longer doing it myself but I saved some money so so worth it
How are you paying a mortgage of less than 1000 dollars for a house that's 226k.... are you including taxes and insurance....are you paying a 1% interst rate...something doesn't add up.
Yes the price includes taxes and insurance. I paid $226k for the house and put 25% down. So I financed around $170,000. Now I got this loan on 2020 when the interest rates were amazing. I believe my interest rate is right below 4%. So including taxes and insurance my monthly payment is below $1,000 a month and I bring in $2,850 a month on that property now
@@brandonlopez2966 ....that still doesn't add up. Even with 25% down and 4% interest.
Since you were unable to do the refinance, what did you tell the original lender for the repayment? Great video thank you
A little confused by this question. I got a 30 yr loan on the house originally. So I am just sticking with that original 30 year loan at a low interest rate
@@brandonlopez2966 ohh okay! Ive been seeing alot of people use a hard money lender or private lender for the BRRRR method. Thanks for the fast reply!
Can't you dispute an appraisal?!
Yes you can but end of the day the appraisals are based on comps. Not much I could do
thanks
People on the internet make it sound like you can pull off the brrrr method with just 10-50k but damn. 125k for everything is expensive
not wrong about that at all. It takes money to make money, and in my case it took a shit ton of money. I could have cut corners and renovated each unit for 25k, but then i wouldn't have updated the old plumbing and electrical work
So I still don't understand the whole 30% thing. Can someone please explain
When buying a duplex for an investment property they require 25% down. When refinancing they require you to have 30% equity based on the appraised value
So what's your next plan?
just holding onto the property at the moment and cashflowing pretty well. May refinance in the future but not sure yet
@@brandonlopez2966 assuming that you have a full time job. have you thought of putting all of the rent money back into the principal. You would probably pay the property off in 6/7 years if you do that.
Thats what we do. We put 100% of our rent plus additional $500 a month into our 3 rentals and will have them paid off in 6 years.
We have full time jobs as well which allow us to pay the extra $500 per property and still save up when another opportunity comes up.
Best way to learn is from your mistakes
How did you find out there was water damage in the roof after closing?? Did you not get a 4point and wind?
We (myself and my contractor) were in the attic on a heavy rain day. While we were up there we saw water leaking in through the side, and some minor leaks in various places (just drips). That's when we decided to pull the gun. Also, a lot of the plywood was damp. I did have an inspection prior to closing and they mentioned that the roof may need a little repair. So they ended up crediting my $2,000 for this that was paid out to me in closing. So I thought I was just going to need to repair the roof, which I definitely couldn't done, but it made much more sense to just go in and replace the entire roof while I was there renovating the entire place
How tf did you get a roof redone for $4k??
$13% is good!