December 9th, 2022
Did you think I’d forget to send this week’s Behind the Beard? Nope - I’m just trying to keep you on your toes… 😉
Something I’m Reading
I just finished “Fairy Tale” by Stephen King which was awesome. I’m still working through “The Name of the Wind” by Patrick Rothfuss (it’s a long read) but so so good.
Something I Teach
10 Tips for BRRRR Investing:
BRRRR stands for “Buy Rehab Rent Refinance Repeat.” It’s a great strategy for “recycling” the money you use to buy real estate. You buy a nasty property, fix it up, rent it for top dollar, refinance and get all or most of your investment back, and hold it for long term. So the following are ten tips to help!
1.) Get long enough “initial” financing to account for your rehab going long. 6 month hard money isn’t gonna be long enough.
2.) Keeping your rehab in budget is fundamental to this working. You have to watch your budget carefully.
3.) Look for “smelly” and ugly properties. Huge rehabs with structural stuff should only be attempted by experienced investors.
4.) Keep the “ball moving down the field” every day on your project. If you aren’t breathing down your contractors necks, they will prioritize other jobs.
5.) The entire “BRRRR” process depends on having an accurate “After Repair Value.” You have to get this right. Ask for opinions from real estate agents as to what your nasty property will really be worth when it’s fixed up.
6.) Know what types of properties rent for the highest amount in your area, and try to find a fixer upper that fits that.
7.) Know that you will have the ability to refinance after your rehab. Talk to a lender before you even buy the property. Know your credit score, your debt to income ratio, etc.
8.) Plan your renovation to look like something Joanna Gaines would have done. People pay more for rent on houses that look like HGTV!
9.) Use “tenant proof” materials on your rehab - stuff that will last long and not require regular maintenance.
10.) Have a backup plan to sell the property if you can’t refinance it … and make sure you’ll still make a profit that way.
For more on BRRRR, read the definitive book on the subject, “Buy Rehab Rent Refinance Repeat” by David Greene!
Something I Photographed
Something I’m Excited About
Open Door Capital is hiring for an Asset Manager! This will be a critical position at Open Door Capital and will be responsible for driving business plan execution across our $650M+ portfolio. If you’re interested (or know someone that is), learn more and apply at odcfund.com/jobs.
P.S. Applications may not be open much longer so apply ASAP!
Something I Can Answer
Every week, I answer one question asked by a BTB subscriber. Have a question you want me to answer? Reply to this text with your question!
Question: “What are 3 pivotal changes or things you implemented in your life that helped lead to your success today?”
1.) I take full ownership of my life and everything in it. When I started acting like everything (good and bad) that happens is my fault, it empowered me to make a better life for myself.
2.) I married an awesome woman and worked alongside her every step of the way.
3.) I started asking, “How can I do this” not “Can I do this.” That simple mindset tweak has radically changed my life.
Your Friend,
P.S. Comment below and let me know your thoughts on this week’s BTB! Please be friendly :)