BRRRR – Hey there, I’m Mike Acquisto Real Estate broker and going over Acquisto Real Estate in Frisco, Texas, and BRX be our our I actually don’t even know how many hours, but it sounds like I’m a pirate and I am not. So what it is, is it is by rehab rent. Refinance and redo, I think, or repeat something along those lines, right? So it’s a lot of letters and a lot of stuff in there, steps to follow. And if you do step one, step two, step three, step four, then you’ll be OK.
Buy Rehab Rent Refinance Repeat
So, hey, thanks. I appreciate that. It is in fact, buy, renovate, rent, refinance and repeat. So that’s a specific method.
The whole idea of this, though, is that you have to be cash heavy and you have to actually pay for these properties up front and they’re often distressed properties. So what kind of go for what this is here? Is it a viable strategy? Where can you do it? Tell me more about it. Right. And it’s just good to know. So is a real estate agent. What we’re trying to do is build your knowledge. And this is a different concept here that might fall just outside of what you’re doing in the residential world. But if you hear this concept now, you’ll be a little bit more knowledgeable about it, right?
So buy, renovate, rent, refinance and repeat. Let’s kind of look at this. So the idea is to buy distressed or slightly distressed properties. We’re going to be chatting in some links to you right now that also allows you to follow along at home and do this.
So if you have done any of this in your past or know somebody who has or had some great experiences with or negative experiences, chat in now and give them stuff to talk about. As we finish this topic up, we’ll hit the comment section and we’ll discuss some of the things that you put in now. So that’s going to give you a couple of minutes right now to put in some things for us to discuss a little bit later on.
Right. So in looking at this, what we want to be doing is buying, right? So that’s the first step. So we have to identify some properties for us that are in need to purchase because they need to be renovated.
So they’re often going to be deals of some type and they’re going to be ones that you want to rent out later on. So there probably there’s probably a major problem with that. And so we need to find out what they are. Maybe they went through like Hurricane Katrina. Maybe they went through like something down in Houston with that. Maybe it’s properties up here that are have failing foundations or I don’t know. But they’re probably big problems. And the whole idea is to fix them up to a newer standard and to rent them out and combine them together.
So those are some of the things now rehabbing. What we’re going to do is bring them up to a newer standard. So that’s a second step in the process. And the first step is going to be accomplished with cash, just like so you’re going to be like making it rain all over the place and you’re just buying stuff. And then you’re also going to be like double making it rain in the rehab section as well, because you’re going to be paying for people to be paying for things and products and renovations and like ripping stuff out.
And you’re going to think you’re on an HDTV show, but like a really bad version of it because it’s going to be your own money and it’s not going to be as glamorous. And Chip and Jojo are not going to be showing up for you to help you out. It’s just going to be you and you. Right. And your money. So you’ll be fixing all these things up, but you’ll be finding your own standard and you’ll find out that the reason that sometimes these eclectic things or these mismatched styles come together is because it’s difficult. You’re going to find things like what you’re going to find like.
You know, waterpipe, you don’t think they should be you’re going to find headers where you’re like, oh, I thought I could do this, you’re going to find all types of issues as you start opening things up. And hopefully you’ll you’ll be able to overcome those with sinking more money into it. Then you’re going to rent them out. You’re going to find qualified people to be able to rent these bad boys from you and pay you on a monthly basis, hopefully pandemic aside. So as you’re paying for this rent, that will give you money, right.
So then what we’re going to look at, yeah, thank you for underlying that, Omkar there. We need to make sure that we definitely get the right rental rates, we get the right people. There’s all types of things that go into rent and managing the property and maintaining this section. So rent is not necessarily just like easy, right? It’s not like one step. There’s a bunch of steps within that to vetting the people, finding out how long they’re going to stay there. There’s a lot to it, but we’re going to zoom
past that whole thing and then we’re going to go to refinance. And when you refinance this, most of the time people are doing this in large blocks, OK, like a bunch of them. So you’ll have people with high net worth and high high cash and they’ll be going into these areas and they’ll be buying a bunch of them all at once. And they’ll be like, give me one of those. Give me one of those. Can be one of those. Let’s do this one, too. Let’s do that. And they’ll buy two, three, five, ten of these properties and then they’ll bundle them all up together at the end. And it gives you kind of a.
In average, I guess that should get you through some of these different times, we know of one person that did. Twenty two of them. Well, that yeah, maybe twenty six, I don’t know. But it somewhere in the 20s and they had really great success with it. But it did take a lot of cash investment. It did take a lot of effort. So you have to know what you’re willing to do and why you’re willing to do it and what the method is.
But when you refinance this all at the end, you’re going to be combining it together is the whole idea, and bring all of this stuff together and you’ll most likely have one kind of like blanket loan, one take out loan, whatever that happens to be to get your cash back. So now you’re going to get a higher valuation based on your effort, your energy and whatever, and we’re doing more of them. You’re going to have like probably success when you do one. You’re really taking a risk when you do to your split it amongst two.
But as you do more like five or 10 or 20, then you’ll be blending your risk and you’ll be learning and you’ll be getting better. And then statistically, you should be OK. And then the whole idea is once you’ve done this, you get your cash back, you have a new loan. It’s secured over here and you have that income that’s paying it off. Then you’re going to go ahead and repeat that and say like, oh, let’s do it again and then have a larger group and put them all together. And then you effectively become your own rete. So there you go. That’s kind of the whole method. Let’s hit the comment section and see what people had to say.
All right, Jan from Idaho Chad, CNN says Dam, that’s a good idea. I wish I started that myself.
Well, Jan, you should have, right? You would have had some more money if you would have started that earlier. Let’s look down here. Pete from Tallahassee says, My uncle did that and it worked out great.
Let me see, Marjorie from Mississippi says, I tried once, no success, oops. So apparently it doesn’t work all the time. So, Marjorie, better luck next time and maybe try with more properties. And you have to know if this is the right thing for you. You have to have skills, finances behind you. You have to have aptitudes, effort and some knowledge. Right. So it is not necessarily for everybody, but it is one concept here in particular that could work out for you. And one final comment here. Let’s read. We have Shana chatting in to Mike.
We are not doing this. No way. No how. Never move on to something else. OK, so that’s all we have for that topic. Thank you guys for joining us there. Anything we can do for you? Let us know. Hit the description in the comments below. See you next time.