How To Finance A BRRRR Property #Finance

so today I’m going to show you a real live deal I just bought we just closed recently we just finished rehabbing the property and now we’re going to work on building out some extra home on this property in Seattle we call them Adu or detach Adu I’m also gonna just throw a

guy a little disclaimer some of you guys gonna watch this CashNews.co go I don’t have that kind of experience or that kind of money but I want you guys just look at the concept how I’m doing it because it’s the concept of matter some other bird deal that I’m teaching my

students they’re not as complex they’re more simple this is a little more you know complex that’s why I can make a million bucks off of one deal so just follow along you have questions you can ask in the comments all right I’m going to share with you guys how I found this

deal and then I’m gonna share with you what I’m doing but more importantly I’m going to show you how I’m financing this bird deal alright so here we go we was driving up the street to check out one of my rental property and my wife Cami saw this house that we have been

mailing to calling and nobody answering and she pulled over and she went up to the properties you know someone’s working on it and she asked the guy hey is this your property and the worker that was there said no he happened to call the owner and the owner got on the phone and my wife Cameron

asked hey have you ever thought about selling this and the owner said it’s funny you asked that I am thinking about actually selling it we end up putting a deal together and we end up buying the property so we got the DFO actually door knocking we’ve been cold calling we’ve been

setting off flyers we’ve been doing all the stuff I talk about on social media we just couldn’t get a hold of them and happened that we went by and the contract is working on and he happened to call the owner’s cell number that you guys called working all the ways on how to get a

hold of the owner so let me break down with you how I bought this deal and then what I’m doing to this deal okay it’s a little complex I’m gonna try to keep it real simple right how to text-decoration: none;">Finance a bird deal a lot of people always ask on social media how do I actually Finance these Birds because you don’t talk a lot about that I

started a YouTube channel now so I can explain to you a little more in depth all right so here we go I bought this property as a fixer for 560 000 okay this house sits on a seven thousand square foot lot or 7200 something like that right but it’s around 7000 square feet all in it costs 140

000 to rehab I’m blessed that I have some money so in this scenario I did not use hard money lending to buy the property and to pay for the rehab since I have some extra cash I decided to pay cash for the property which is 560 000 and I paid cash if we have the property so I’m all in

the 700 000 so I put up all 700 000 my own money to do this without paying homemade lending to borrow their money now some of you guys are probably watching and saying well I got that kind of money if you don’t have that kind of money you can use Harmony lending some deals that I do I

actually use Harmony lending on another project on another CashNews.co I’m gonna show you how I use Hardware lending on the deal but for this deal right now let’s just stick with it I paid cash for this property okay so I’m all in for 700 000 dollar this property literally is

coming around getting done this property I know from selling Real Estate by doing all the comparable this house of hair is worth a hundred fifty thousand dollars that right there you guys in what I call a hundred and fifty thousand dollar worth of Equity Sweat

Equity this is why you all hear me talk about I don’t like buying property that’s on the market if I was about on the market I pay 850 for the same as at home but since I rehabbed it put my own time and my own money my own risk my own sweat in it by the time I’m

done I get to pick up 150 000 with the Sweat Equity okay this property here we can rent this property for 3 500 bucks I’m gonna show you right now on what the mortgage gonna be on this how much cash I’ll make it this is what I’ve done so far all right so be sure

now let me show you this so remember how I always talk about bird I always say when I do a bur I want to get all my money back so right now I got 700 000 on this property I want to get my money back I have no money invested and I want a Cash Flow test to pop it all free and clear

and it’s time to when I come I’ll do the refi remember buy it as a fixer rehab it which we did already rent it out and now it’s time to refi and get my 700 000 back out okay here’s what I know bank will lend me up to 70 of the arv 70 850 is 595 000. let’s call it 600

grand for easy calculation but if I actually go get a Loan for 600 000 you guys the mortgage on this thing right here will be probably close to thirty eight hundred dollars and I only can rent it out for 3 500 so I’ll be negative I don’t want to do that so I asked

myself how much of a Loan do I need to actually Cash Flow well remember it’s just not only free and clear the bank will give me up to 600 000 but I decided I’m gonna get a Loan for 450 000. the interest principal property tax

Insurance everything is about twenty eight hundred to three thousand dollars call it 300 3 000 for the mortgage I can rent this out with 3 500 bucks I mean I have Cash Flow 500 bucks but I have to leave 250 000 of my own money remember I put out 700 Grand so

I’m gonna only gonna get a Loan for 450. I mean I have to leave 250 Grand of my own money in this deal this is why I always talk about the Burr model in order to do the Burr what I call the fat standard of full Burr I always like to get at least 30 percent

Equity on this deal right here 150 000 divided by 850 000 that’s only like a 17 18 margin so it’s far away from thirty percent that’s why if this deal didn’t have the space so I could build the extra Adu in Nadu this would be a flip deal probably more like a

wholesale audio for me okay but since I can put audio Adu on this property this is a good deal I’m going to show you in a minute but again I’m only going to get a Loan for 4 20 450. my mortgage on this is three grand all in private tax return everything I’m gonna

rent this out 3 500 I’ll make 500 bucks a month but I gotta leave 250 000 of my 700 Grand in this property yes I still got 250 in it but I’m gonna show you how I’m gonna get the other 250 back out so I’ll be no money vested okay this is the primary house you gotta get it now

I’m gonna show you the bonus so on this same property I have the opportunity to add two more home on this property at Adu and dtac Adu in Seattle the max of a square footage we can do with a thousand square feet each unit I’m gonna break down the number how much it cost me I’m

gonna break down again how I’m financing this deal the bird model so the Adu I got the land for free because I came with the property right now just so you guys know the zoning on this is single family zoning in all big city now the city are allowing people to put a detached dwelling unit or

a additional dwelling unit on the property on single family zoning California doing it all through the state of California a lot of cities are doing it now because they want to create more density to create more housing Okay so says I had extra land the light is free new construction to build a

thousand square foot unit is between 250 and 300 000. I just did one for 250 000 but I’m just gonna call it 300 000 on the high side so I mean I’m all in you guys land and construction for 300 Grand the Adu when it’s all done it’s worth 800 000 in this neighborhood recently

right there’s a bunch of them so over 800 no problem so this thing could be worth 800 no problem I mean I’m arguing for 300 this is worth 800 I mean I got a 500 000 with the Equity up for one deal is that crazy now the doctor which is awesome remember two property on

this property it’s the same number free land 300 000 for construction 800 000 arv also in these two deal I’m making a million dollar in Equity you guys on the two property that is what I call crazy I’m gonna pay cash to build these out but I’m gonna show you

how I’m gonna Finance this bird deal to get back my 300 000 and remember the other 250 from the primary house I still got stuck in there okay am I going to get 300 300 back out which is

600 plus the 250. so watch the bank will Loan me up to again 70 800 000 I mean they was only up to 560 000 on one deal I got two of them right so they will Loan up to 560. but I don’t need all 560 because I know if I borrow 560 my Loan

amounts gonna be high and my monthly payments gonna be high I want Cash Flow remember I’m only 300 000 into this deal I just didn’t get enough money to get my 300 Grand back out but I also remember I got 250 Grand on the primary so if I got two property I said to myself

well what if I got a Loan for 425 on each property if I got 425 I mean I got 300 Grand back and I got 125 from the primary if I did that over here that means I got both 300 000 back in my pocket and I got actually 250 that 250 is I put back my pocket because I left 250 in the

primary house so if I got a Loan for 425 of each property I will get all my money back on both of these new construction and the left over 250 are left in the primary house now I am literally zero money in this deal of my own personal money if I got a Loan for 425

okay Interest Rates five percent that’s how it is right now which sucks my principal interest property tax everything is about 26 20 let’s call it 200 bucks I can rent this house down for 3 200 bucks I mean I make 400 bucks a month in positive Cash Flow

off of one deal times two deal take that time two makes sense so 425 let alone for this 425 alone for this if I do this I will get back my new construction money I’ll take him out of pocket 300 each and extra 125 on each which is 250 that means that 250 left in the other house is coming back

in my pocket all right so let me now show you the recap of the whole thing so in a recap how I Finance this bird deal about a single family property a remodel a house and I

added two more structure on this property and I’m gonna have no money in this deal and over a million dollar Equity so let me show you the recap the primary house I got a Loan off of 450. the arv is 850 that means I got 350 000 to Equity in

that property I get 500 bucks a month in positive Cash Flow let’s call it six grand a year in Cash Flow for the primary house on the Adu I got a Loan for 425 the arv 800 000. the Equity is 375 000 and we get basically 400 a

month which is 400 a year in positive Cash Flow they don’t do the same thing 425 800 000 375 000 of Equity four dollars a month forty hundred dollars basically a year so at the end of the day you guys the total Equity is one million 100 000

for this one deal I just did about one fixer house and I remodeled it and I added two more homes on this property and at the end of the day I made one million one hundred thousand dollars made a million dollar for one transaction the Cash Flow fifteen thousand six hundred bucks a

year a year in all three property and at the end of the day you guys I have all my money back in my pocket I have no money invested so this in what I call a smashing deal this is the reason why I bought this property so now you see in depth how I buy property how I do the Burr how I

href="https://cashnews.co/finance" style="font-weight: bold; color: #1a73e8; text-decoration: none;">Finance the bird and how I do it with no money vested key is if you ever want to do bird you got to find the right type of property sitting on the right opportunity if you can add value

and force value it makes it easy if you get 30 with the Equity on the deal when you get 30 Equity you’re acting literally at the end of the day have no money invested and have all this now some of you guys might say well damn that you got a million dollar in

this property all you get fifteen thousand dollars yes pump your brakes but remember I got no money invested that’s like me walking with you guys go here’s three free houses that give you fifteen thousand dollars a year in Cash Flow and a million dollar

Equity would you take it of course you would take it right when the opportunity is right we were 10 31 days into other property that would make us even more money more Cash Flow but if I sold this today and just purely sell out with my tax bracket this million

dollar Uncle Sam will probably take half of that money I mean I walk away with like five hundred thousand dollars and no Equity no Cash Flow nothing when I do this it’s a good deal and I got a lot of Equity I don’t mind keeping it

because I got money to keep these deals I keep it for at least a year so I can avoid Capital gains and then later on I can actually roll this whole Equity into a tenderloin to Better Properties I make way more money this you guys smart way of doing it this is how

you create walk forever and ever and ever this is how I Finance a bird deal that that style that that’s standard and you need 30 Equity minimum to do

it this time all right so if you gotta like this CashNews.co like the CashNews.co for me and also subscribe to the channel alright talk to you soon