The Fastest Way to Build Wealth Investing in Real Estate: The BRRRR Strategy

Investment Strategies

It’s no surprise that this is my favorite way to invest in real estate, and also one of the fastest ways you can grow your wealth….and this is called the BRRRR strategy of real estate investing. Enjoy! Add me on Snapchat/Instagram: GPStephan

Learn my exact strategies to help grow your career as a real estate agent to a six-figure income, how to best build your network of clients, expand into luxury markets, and exactly what you can do to begin taking your career to the next level…these strategies took me to $120,000,000 in sales volume: https://goo.gl/UFpi4c

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The BRRRR Method: This basically uses the equity and profit from one property to fund the next property through strategic leverage. And then the next property can fund the next one…and so on, until after a few years you’ve amassed an army of homes that just throw cash at your every month.

1. The first step is to buy a property, obviously. But the difference here is that you can’t just buy anything – the property not only needs to cash flow, but there needs to be some opportunity for equity. Your equity is basically just the amount of “worth” tied up in the property, minus your loan balance. So you either need to buy into equity by buying something BELOW what its market value is, or buying something where you can add equity with strategic renovations. Most deals won’t work – you need to be better than the average here and really become an expert in your area to spot the best deals, and the patience to wait around until that happens.

2. Renovate. Once you buy something, you’ll fix it up. Generally this is the best and easiest way to add value to a property. Most places that need work price themselves accordingly. Doing the work yourself saves you from paying someone else’s profit in managing a renovation, and often times you can renovate a property much cheaper than someone else will charge for doing the same thing.

3. The third step is rent…in that you now rent out the property. You should have had an idea of what price you’d get from the beginning when you bought the property, so it shouldn’t be a surprise what you can rent the property for. The property should rent high enough to pay off all of your expenses AND cash flow on top of it. Like I said, not every property will do this – you will need to find the 1/30 where it makes sense to buy, at the right price, that’ll rent for high enough, with enough equity to add to the deal.

4. NOW WE REFINANCE! This is where the bank pays off your previous loan, and gives you a NEW loan based off the new, higher value of the property. This means that you’ll have some “Cash at closing,” as it’s called. Now you pretty much got some money back, you have a cash flowing house, and you can do this entire process over again.

5. And then…you repeat the process and start over again with the next one! The advantage here is that every time you buy something under market value, you increase your net worth. By fixing it up, you increase your net worth and cash flow at the same time. The higher your net worth and the more equity in a property, the more banks are willing to lend you to do it again and continue to increase your cashflow. This is by far my favorite strategy, and you’ll finish this up with a trail of cash flowing properties behind you. Yes, it takes some work to identify and fix up a property – but it’s worth it.

For business inquiries or one-on-one real estate investing/real estate agent consulting or coaching, you can reach me at GrahamStephanBusiness@gmail.com

Suggested reading:
The Millionaire Real Estate Agent: http://goo.gl/TPTSVC
Your money or your life: https://goo.gl/fmlaJR
The Millionaire Real Estate Investor: https://goo.gl/sV9xtl
How to Win Friends and Influence People: https://goo.gl/1f3Meq
Think and grow rich: https://goo.gl/SSKlyu
Awaken the giant within: https://goo.gl/niIAEI
The Book on Rental Property Investing: https://goo.gl/qtJqFq

Favorite Credit Cards:
Chase Sapphire Reserve – https://goo.gl/sT68EC
American Express Platinum – https://goo.gl/C9n4e3

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22 Comments

  1. Would you recommend BRRRR strategy of doing all cash buy or financing the home initially? Example of $120k property and 30k rehab estimate; if u had $150k cash would you rather just pay cash (may get better deal and faster closing) or go traditional mortgage and 20% down? If cash, still repeat same process of buy, rehab, rent, then do your cashout refi. thanks

  2. Thank you man, in the whole Youtube only Doug DeMuro can explain things as clearly as you can:) mixed up my mind with others until I finally learned from you the idea of refinancing.

  3. 6:37.

    I need someones input please.

    How is it possible to have TWO loans on one house?

    I get that the first loan is 160k.
    -He does some renovations and all-
    Now it's worth 280k.

    Does Graham not need to sell his house at this moment for 280k to get the new loan along with 20% downpayment?

  4. Hey Graham Steven i bought my first house and paid cash that i had saved and now im renting it.can you please give me any tips on how to invest into my 2nd home? Thanks

  5. i cant wait for when all you poo investors default on your loans bc you run your numbers based off clickbait videos from this twink, so go ahead, feed your deals to shark investors out there like me waiting to scoop your property at auctions!!!!

  6. this method is true and works but graham stephen, along with others like morris invest, chris krohn, etc, sugar coat their numbers. not many places in the world where you can find a property for 40k , put 30k of material in, and have it appraise at 280k come cash out refi / home equity loan time…

  7. I have my own method I call UBRRRR.

    The U stands for undercut – secure deal below market value. Allows you to gain equity before renovations even occur. Get loan through broker with LoC you could renovate the house using a LoC from the immediate equity rather than saving money.

    $230,000 – Property Value
    $205,000 – Undercut and get deal
    $20,500 – Deposit
    $179,500 – Mortgage
    $25k – Equity
    $20k is accessible equity
    20k in renovations increases value by $50k
    $205,000 + $50,000 = $255,000 – New property value using old evaluation plus renovations
    $179,500 Original mortgage + $20k LoC/renovations = $199,500
    LVR = 78%

    Rent
    Refinance:
    – Includes revaluation of $230,000 + $50,000 = $280,000 new property value
    LVR = 71%
    Repeat.

    Also if you plan on renovating a property, 20% deposit is kind of a waste isn't it? Whole point is to avoid Lenders Mortgage Insurance, but if you're increasing the property value, you're better off spending less on the deposit and more on renovations. Your aim should be to increase equity as soon as possible if your intention is to make fast growth.

  8. I've been watching your videos for the past days and this seems a nice way to make money but I still have a question. Now, I'm not from the US, I live in Eastern Europe and I do not know if this process you describe can be applied here too. My question is what happens with the interest from the first loan. Usually banks will give you, like in your example, $160k and you are responsible for paying way more than that (let's say $330k), within the next 30 years for example. So I do understand that by getting a second mortgage you actually will have that $160k to pay the first loan, but that's just the principal part. You will still have to pay the interest and somehow that was not the deal with the bank since you are accountable for paying way more than $160k, over a period of 30 years.

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