Episode 355

BRRRR Mastery with David Dodge

This episode we focus on the BRRRR method of real estate investing. So let's get into Buy, Rehab, Rent, Refinance, and Repeat.

David Dodge is a St. Louis Real Estate Investor with over 18 years of experience. He first started investing in Real Estate when he was in college, at the age of 20 while attending the University of Missouri-Columbia. David specializes in Wholesaling Real Estate as well as using The BRRRR Method to acquire Rental Properties with NONE of his own money! He also LOVES teaching others how easy it is to learn how they too can wholesale Real Estate for huge profits & how they can use OPM to buy rental properties! David and his team have wholesaled over 750 houses to date and his company “House Sold Easy” averages about 5-10 wholesales a month. David also loves to fix-and-flip properties as well as add properties to his rental portfolio. David has over 90 rentals currently (over 20K in Cashflow) and he has a goal to take his rental portfolio to over 200 properties in the next 24 months.

David is the Author of 3 books: “The Ultimate Guide to Wholesale Real Estate”, “The BRRRR Method” & “The 3 Pillars of Wholesaling Real Estate”. His podcast “Discount Property Investor” teaches people all about wholesaling real estate as well as tons of tips and tricks about marketing, land-lording, rehabbing, and utilizing The BRRRR Method.

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"You can invest 10,000 hours and become an expert or learn from those who have already made that investment." - Jack

Transcript
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Welcome to the REI Mastermind Network, where host Jack has gathers amazing stories from leaders in real estate investing.

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In each episode, our guests will tell you what they're doing that works what they've tried that failed, and best of all, you'll learn actionable steps to take your real estate investing.

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To the next level.

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Now here's Jack with another value packed episode.

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We have David Dodge with us today and so this is your episode if you're interested in the Burr method. So, I'm going to send everybody to David's website first, so go to wholesalinginc.com/rentals, where David has quite a few quite a bit of information.

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There on what you can learn about the Burr method and what's it all.

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About but David, I really appreciate your time here today.

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Hey, I really appreciate you having me.

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I'm super grateful for this opportunity to come and provide value to your audience Jack, so thanks for having me, man.

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No, I appreciate it, and you know you host a podcast as well, so discount property investors is one of them.

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But you pop in and out of the Wholesaling Inc podcast quite a bit as well.

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I bring that up is because we have so many listeners that pop in and out on these type of shows.

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So, I this is going to sound simplistic, but I kind of want to start off for those people who aren't as familiar with what Burr is to let's define, take a minute and define it.

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Yeah, absolutely man.

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Burr is a acronym and a lot of people they refer to it as the Burr method, which what I refer to that.

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In fact, I've written a book called The Burr Method which breaks it down.

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And burras is B with four hours behind it, so that's what the acronym is you know, made up of, and each of those letters represent a word or a phrase.

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So, B stands for buy and I like to add at a discount 'cause that's very, very important.

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And then there's four hours behind the B and those ours.

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Stand for rehab, rent, refinance and then the last hour is repeat, so some people refer to this as BIR with.

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Three hours be with.

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Three hours and then other people will refer to it as B with.

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4 hours for Burr.

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That final are not, it just stands.

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For repeat, right?

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So, I've even heard people refer to this as the burrs method and they just replace that 4th R with an S and they just say scale instead of repeat, but at the end of the day it's all the same, so again.

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To sum it up, it's to buy it's to rehab.

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It's to rinse it out and then it's to refinance.

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And then, of course, this strategy is very, very scalable.

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So of course, add that last are in there for repeat and that is what it is.

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My friend.

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Yeah, no I appreciate you taking a minute.

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I, I know it sounds pretty elementary, but I really think that's it's pretty important to get everybody on.

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The same page.

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What I think is really interesting is that.

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You start things off by stating buy at a discount.

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A lot of the Burr methods that I've seen and a lot of people that talk about.

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They kind of missed that last little bit there.

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Yeah, yeah, you know, there's two simple strategies that we use within the Burr method to allow us to buy properties and own assets.

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That allow us to do this with little to no money essentially, and those strategies are very simple, right number one buy properties at a discount and #2, we're going to increase the value of that property with a rehab. So, by buying at a discount, we're capturing equity, and by rehabbing and you know renovating the property.

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Rehab renovate, upgrade.

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Update it's all the same thing at the end of the day.

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And the goal would be to increase the value of the property above and beyond what the rehab is.

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So, for example, if the rehab is going to be 20 grand, we would hope to increase the value of the property by let's say 30 grand.

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So, the beautiful thing about the burn method is it allows us to acquire assets with little to no money.

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And Jack, this is kind of cool.

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I was actually making a case study before we jumped on this podcast, and I actually have a check here in my hand.

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k I'm holding in my hand for $:

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Dollars and $0.25, and this doesn't seem like you know, it may not seem like a big check to a lot of people that are listening.

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You know, however.

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In my opinion, this is a home run, maybe even a Grand Slam because by going through this method and using this strategy right, the Burr method I was able to.

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Acquire an asset with none of my own money.

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It's a rehabbed rental property so all the capital expenditures and cap ex.

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Are going to be taken care of in advance and we shouldn't have any major expenses on this property for at least the next 5 to 7, maybe even 10 years.

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walk away with the check for:

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Bucks, so when I say that.

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You know you can.

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Use this strategy to acquire properties with little to no money.

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That is very, very true.

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But in some case.

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This is you can get a really, really good discount on a property and you can actually get paid to acquire a rental property.

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So that is just awesome.

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I love this strategy.

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Yeah, so you know the I keep focusing on the buy at a discount, but I mean we've heard as we're getting into real estate investing and a lot of our listeners have heard the concept of you make your money at the purchase and you're just really reinforcing that aspect of it and showing us that example.

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What you just did there was awesome.

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But dumb when you say little to no money to acquire.

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Do you?

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Would you say that's even possible when?

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When you're doing that initial acquisition, let's say we're talking about somebody who is getting into real estate investing for that very first time.

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They don't have a lot of money.

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Let's go through the process of what they would do in order to land that first property.

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Yeah, absolutely.

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I love helping people learn this strategy and I coach and mentor people on this strategy and in order to do it right, you have to follow the process.

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So, before we jump into that.

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Process I want to take a step back just for a minute Jack and I'll keep this super short, but in the beginning when I first started buying rental properties I would go, and I'd find a property on the mills, and I'd use an agent and I'd make the offer and the offer would get accepted. And then let's say it was $150,000 property.

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Which is about the average price of what I had been buying and still buy and I would then go to a bank and the bank would say, hey Dave, great, we're excited for you. We're going to lend you 80%.

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And the thing that you know I look at that as the as the old way of doing things.

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And I and I kind of look back and say, hey, I, I did this kind of wrong in a way.

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Now obviously buying rental properties, regardless of how you do it, is a good investment in my opinion, but.

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The bank would lend.

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80% on these deals and.

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Of course, at 150,000.

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That leaves 20% or $30,000 that you have to bring to.

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The table so.

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The old way of doing it, not with bur just buying a rental.

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You're typically going to be required to put down 20%, and if the property is about 150,000 like the ones I like to buy, that means you have to put down $30,000. You may have it.

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You may have saved it.

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You may have borrowed it, but regardless, you're putting down 30 grand to acquire a property.

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So now circling back to your question.

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Can somebody do this? You know, without having a bunch of money, well, the answer is yes exactly. So now that we use the burn method and we go through this strategy, we are still essentially having 20% skin in the game. But the difference is we're using the equity that we capture and.

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Or the forced appreciation to be the skin in the game. So, the banks still going to lend 80% when you're using the BUR method. But the difference is they're not lending 80% on what you're.

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Buying it for your purse.

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This price that's really irrelevant after you already own the property.

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So, the big difference here is I'm not going to banks, local banks, local credit unions, even some of these national.

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You know lenders and asking for them to help me buy a property.

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I'm never going to them and saying hey, I need a loan to purchase.

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I'm doing it a different way and I'm using the Burr method which will explain in more detail.

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In a minute, but whenever I am going to these long-term lenders, the difference is that I go and I say, hey, I already owned this property.

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This assets already in my name it's.

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Remind but I owe somebody else money on it and that's where your question is going to get to.

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In a second here.

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But what I would like to do now is I'd like to refinance and then the difference is they don't lend on the purchase price.

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They lend on the appraised amount of the home, so if we can be all into the property all in purchase rehab interest holding costs.

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Closing costs util.

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These you know, hard money or private money interest all in if we can be all in at 80% of what it appraises.

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For in theory, the bank will pay back that private lender and all those costs, and we'll be able to acquire this property with little to no money.

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Or in some cases, you know, walk away with the check at the end of the day, so how?

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Do we do this right?

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Well, number one.

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We buy it at a discount, but we have to buy it and I don't use any of my own money.

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When I buy properties, and in fact I try to encourage everyone of my student.

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To go create relationships.

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With hard money or private money lenders opium, other people money.

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So, we're going to go and we're going to find a private money lender or a hard money lender.

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And we're going to build a relationship with them, and we're actually going to get pre-qualified.

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That's actually step one.

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It's not to buy the property, it's to go get pre-qualified and line up your financing.

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Step 2 is to locate a deal right.

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If you can buy a property.

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At a 20% discount or you know .8 or 80% of what it's really worth. You've just captured equity and it's going to make this a whole lot easier.

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But we are borrowing money from private and hard money lenders to acquire the deal and the deal actually transfers from the seller's name into our name or our entities name.

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And we in fact have a mortgage, but that mortgage is with a private or a hard money lender.

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So, leverage is really one of the most beautiful things when it comes to real estate.

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And it's in fact one of the most beautiful things that we can use and take advantage of when we're using this awesome strategy called the bar method.

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So, we borrow this money from a private or hard money lender, and I borrow 100% of what I need.

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In some cases, 105 or even 100, and.

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10% So what I mean by?

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That is, is I locate a property.

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And I always buy properties at a disk.

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There, and I'm going to borrow not only the purchase price, but I'm going to borrow.

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The purchase and but.

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I'm going to need to rehab that.

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Property and in.

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Some cases I might even tack on another 5 or 10, or in some cases, even another $20,000.

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On top of that, and I'm going to borrow 100% of what I need from these lenders. So, the deal actually goes to a title company or closing.

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Attorney like a traditional deal would and it transfers.

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We own it, but we now have some debt on it.

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We take that additional money that we borrowed above and beyond the purchase price to go rehab that property.

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So that's the 1st 2 letters by B and the first R is to rehab, right?

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Then what we?

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Do is we list that property for rent, and we get a tenant that's willing to sign a lease and move in and pay us rent well that step there.

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That second are you have your by you have your rehab.

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You have your rent, that second are is what makes this an asset, right?

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The property is not an asset when it's not rented.

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It's in fact it's a liability.

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But if the rent is above and beyond what we have to pay, you know with all of our expenses it's going to create cash flow, which is passive income and banks love to lend on properties that are cash flowing, right?

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They know that that is an asset at that.

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Point so then.

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The next step would be to go.

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To a bank a long term.

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Lender could be a local bank, could be a National Bank.

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I really like working with local banks and local credit unions.

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And I then approached them and again I said this earlier and I'm gonna say it again.

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I never walk into that bank or contact the lender and say, hey I'm trying to buy this property.

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I need a loan.

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I've already bought that property.

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I've used a hard money or private money lender and I found myself a deal.

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I've already rehabbed it.

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At this point I've already got it rented.

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At this point, and I walk into that.

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Bank or email or call or whatever it.

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May be, but it connects with my local.

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Banker and I say hey, I got another one.

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I'm using the Burr method.

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I'm very transparent with them.

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They know what I'm doing.

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I'm not hiding anything from anybody, but because I am so good at buying deals and because I am so good at keeping my rehab within my budget.

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I have built in a minimum of 15 or 20.

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In some cases, 25% equity in.

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The deal and my bankers and lenders know this.

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This is no secret.

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So, what I do is I go to them, and I say hey, but I would love to refinance out my existing debt with this private lender or this hard money lender that helped me buy it.

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Oh, and by the way.

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They lent me additional money to rehab it.

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So, what do we need to do to get this this thing refinanced and they don't.

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Never asked me what I paid for the property because I'm not looking to buy it.

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I've already bought it.

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I already own it right, but I have a short-term debt solution from a hard money or a private money lender.

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So, the bank says, alright, great, we're going to send an appraiser out.

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And you know, typically speaking, I'm going to get an 80% loan depending on the neighborhood, you may get cut down to 70 or even 75 somewhere in that range, but typically speaking, the banks are going to lend me 80%.

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Well, if I'm all in.

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At 80% or below, that means that I'm going to be able to pay back.

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That private lender or that hard?

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Money lender and have a new mortgage with a bank.

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That's long term.

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Ideally, at half of the interest rate because private money lenders are typically 10 to 12% give or take and hard money.

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Lenders are typically going.

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To be between 12 and 16%.

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Give or take.

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Right, But that's OK.

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It doesn't scare me.

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It doesn't bother me that I'm paying this higher interest because without these individuals I would never be able to acquire these properties.

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And another thing I want to highlight here is.

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Is that when we're borrowing money from a private or a hard money lender?

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This isn't a 20.

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Year loan, right?

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This is typically a four to six, maybe even eight months at the most, but ideally, we can do these in, you know, 3-4 months, right?

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So, this process isn't something that we can do very quickly.

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It's not a day or a week type of a game, but I have done some of these in record time in the past with.

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You know, maybe a month and a half, two months, 2 1/2 months. You know, on average, it's probably around four months give or take to get through this process.

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But to answer your question, you don't have.

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To have a.

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Ton of money.

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In fact, I don't use any money on the deals that I do.

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I don't use any. I borrow 100% of the purchase and 100% of the rehab. Buy it at a discount.

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Rehab it, go get it rented, which makes it an asset and then talk to that long term lender.

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But again, I'm not asking that lender to help me.

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Purchase the property I already own it.

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What I'm doing at this point is I am asking them to refinance out another lender and there's so many advantages here because when you go to do a refinance, the underwriting process is going to be a lot simpler and quick.

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Quicker because they are essentially piggybacking on the due diligence of that initial lender, and that initial lender may or may not have done a bunch of due diligence, but the bank doesn't know that.

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They just assume that hey, if.

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Somebody else is going to.

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Give you the.

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Loan they must have done some due diligence so they're able to.

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Piggyback on that.

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Another advantage is.

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They're willing to lend on what it appraises for.

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They don't necessarily care anymore what we bought it for. So instead of coming to the table and putting down 20% or 30 grand like I mentioned on 150.

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$:

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Now what I'm doing is I'm using the skin in the game.

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The equity right that I was able to capture by buying it at a discount and fixing it up.

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As that 20% down so can you do this with little to no money? Absolutely I don't use any of my own money.

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I borrow 100% of what's needed from private and hard money lenders, and you don't even have to necessarily have perfect credit.

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You got to have some credit, of course.

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'cause you got to get a loan, but you don't necessarily have to have.

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A ton of money laying around or perfect.

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Excellent credit to use this strategy.

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I love it.

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So just a reminder for everybody head over to Wholesaling Inc.

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Com slash.

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Rentals For more information about what David is talking about here.

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You know one of the things this is just going to be speaking from personal experience, David.

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You know you.

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You mentioned after doing the refinancing and I might be I'm.

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I'm obviously in a in a smaller community.

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Then you, but we actually had a few situations now where, you know, we're buying properties in the same streets and and in a few other things.

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So, when we're buying properties at a discount, we started to influence.

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The comps in that neighborhood, because of the discounted purchases.

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So, we actually had, we had to actually have to renegotiate or talk to the appraiser of that refinancing bank, because we were running into problems where it wasn't appraising as high as it needed to be.

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Yeah, you know what?

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That can be that that is an issue.

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Sometimes, however, you know what we do is we show the appraiser that we bought it at a discount, and then we show them the repairs that we made.

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And in fact, I will often bring a, you know, a printout of an Excel file.

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Or a Google Sheets file that shows.

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You know all the money that we spend, and we will point out that we put a new roof on the property.

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Will point out that the properties got brand new Windows will point out that the HV AC and the water heater are brand new.

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We will point out that the property has been freshly painted and it's got new light fixtures.

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We will point out if it's got a brand-new kitchen or countertops or cabinets or whatever it may have.

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We will point out that.

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And new bathroom.

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So, the fact that there may be lower comps can be a challenge, but it's an easily, easily overcome able one because you can show that the cop is referring to a property that needs a bunch of work and the one that you are trying to get, you know.

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Appraised has had a.

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Bunch of work done to it.

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And you know most people are going to put two and two together and have common sense and say, Oh my God.

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Business we see that you bought this at a discount.

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That's great.

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Good work, but those comps are irrelevant because as you know that by definition cop means compareable.

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And if a property has a brand-new kitchen, a brand-new roof of brand new HV AC, it's not going to be comparable to the low comps that don't have those items.

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So, great question.

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Point, but in my opinion, that is a super easy thing to overcome because again you can just show the appraiser all of these new things.

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And maybe there are some high comps that have these new things that you can then compare to.

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Sure, so when you're coaching your new students like where do you typically instruct him to get to begin?

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Like some of some people are.

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For the most part.

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They're getting into the Burr method of any kind.

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They don't really have a lot of construction experience or that type of knowledge.

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So, they all their experiences may be seeing the HDTV.

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Get it done in 30 minutes as is there.

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So where do you?

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Where do you instruct them to get started with?

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With that first property?

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Great question, great question so you know as you do this over and over again. I've done about 200 bird deals, so I consider myself to, you know, be a master at it, right?

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In fact, I did 1-2 days ago. We got the check right here able. I acquired an asset and I got paid to do it right it's.

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Not a ton of money.

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But who do you know that gets paid to acquire assets?

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Very few people write use this strategy.

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Use this method and you're going to be able to do that as well.

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So, in the beginning, you know if you're not really the best at buying deals.

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You may have to leave some money in the deal, but let me ask you a.

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Question real quick.

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You know, if you were to, you know, use this strategy.

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And you were able to borrow the money to buy it.

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Borrow the money to rehab it.

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Go rehab it.

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And let's.

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Say that you didn't get the best deal on the buy. You didn't get a 20% equity. Capture out the gate, you only got a 10% equity capture out there.

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Right, and then, let's say that you rehabbed it and maybe you went over budget a little bit, right?

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And in the end, you had to essentially come to close you know at the close the refinance bank is going to pay back your private lender and you know for the purchase the rehab, the interest you're going to have cost to close, you're gonna have holding.

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Costs so and so forth, but let's just say you get to the finish line, and you got to bring 5 grand to the table, right?

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Well, at the end of the day, that is still a massive discount compared to $30,000, right? Remember, whenever I took a step back and I said I want to tell you guys a quick story about so. The reason I tell that is because.

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Before I learned the better method, I was already investing in real estate for 10 years, actually, probably closer to 12, and I didn't know about this method, but I was still buying rentals.

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And in fact, in the 1st 10 years I acquired 12 rental properties and they averaged about 150,000.

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There's a piece.

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So, if you do the math, ten of those at 30 grand piece is 300 grand, 12 is $360,000, so I had to come out of Pocket 360 grand over a 10-year period to acquire 12 rental properties.

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So even if you don't do it perfectly, and that's really my job as a coach is to help you avoid these mistakes and to do this.

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With little to no money as possible, and if you get really good at.

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It like me you.

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Can get paid to do these deals right?

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But even if you have to leave a little in five grand, even 10 grand, hey, that's a whole lot better than $30,000, which essentially is 20% of $150,000 purchase. So, the goal, my friend is always little to no money, but the home run grand slams like.

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I just hit earlier this week.

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Are the ones that you actually get paid at closing to do the deal?

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So not only did I get paid and it's not a bunch of money, I mean 5 Grand 5 grand.

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I mean, who doesn't want an extra 5 grand?

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Let's be honest, right?

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But I now own an asset that's got long term financing in place with a fixed loan, right?

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A fixed interest rate. It's been fully rehabbed, and we typically put about 25 to $30,000 worth of rehab into our properties. So, it's got a brand-new roof, brand new HV, AC, brand new.

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Boring brand-new Windows, typically a brand-new kitchen and or a brand-new bathroom, so I've reduced all the capital expenditures for the immediate future.

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And when I say immediate, I mean like 5 to 7 years, maybe even 10 years, right?

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There's still going to be maintenance, of course, but I've reduced all the major big expenses for a decade essentially.

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I've increased the value of that property, so when it comes to getting it appraised, I'm going to have a really good appraisal because everything is clean, fresh, new and up.

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rties in the area renting for:

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But mine's got a brand new.

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Basically everything in.

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or maybe even $:

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It's a good method to do that but acquire assets that you really want to own.

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Good ones that are going to appraise for a lot of money.

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And help you.

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You know not have to put down a bunch of money to acquire them.

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Assets that are going to not need a.

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Bunch of work, right?

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Away and assets that are going to rent for the highest in the neighborhood, right?

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So there.

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Are so many.

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Advantages to this strategy?

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Hopefully I answered your.

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Question Yep, you sure did so. You know I have to ask that you've said you did 200 transactions.

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And I've done about a.

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What is?

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1000 Transactions 200 of those have actually been burrs where I've gone through the entire process and refinanced.

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OK.

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Sure, OK, so you went through 200 burgers. What is your one biggest mistake and what did you learn from it?

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Love it man.

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Love it.

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So, this is a great question, so I have lost money on three real estate.

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bird deals done about:

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flip two and so at over about:

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Number one I overestimated my RV, so I don't care if you're wholesaling fix and flipping, buying rentals using the bird method like I love to do not overestimate your RV.

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Get a conservative AR.

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Be and if it sells for more or appraises for more, that's icing on the cake.

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My friends, but do not try to set a new record with your Airbnb.

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Airbnb stands for after repair value.

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For those that don't know.

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So, figure out what you think a good conservative RV is and stick to it.

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And if you beat it, great icing on the cake.

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But on the three deals.

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Out of:

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The second thing I did wrong was I underestimated the cost to fix these properties up the repair estimates.

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And when you underestimate your costs of repairs, you are going to have to get more money or dig into your pocket to fund the rest of the repairs.

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So, the two things that I would caution anybody and everybody.

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I don't care if you are brand new or if you are an experienced investor like myself is to be conservative.

::

With your RV, don't overestimate them and then on.

::

The flip side is.

::

Don't be too conservative with your repairs. Pad them a little bit so when I walk into a property and say I think I can do this for 20, maybe 25. I'm above 30 because I know that if I screw up and I underestimate these.

::

There's I'm going to get into hot water here, right?

::

Or I'm going to get into some situation where I'm going to have to go get more money or use my own money and I don't want to use any of my own money.

::

I want to borrow every penny that I can to do this right? That's another beautiful thing about this strategy is we're acquiring assets and we're using other people's money to do it so.

::

On that topic, let's talk about leverage.

::

Just for a quick second.

::

Here, we use leverage in every step of the model.

::

Here, every step of the strategy.

::

So, when we're buying at a discount, we often leverage wholesalers in our market, right?

::

We do a lot of marketing and find deals direct to seller and I would.

::

I would.

::

Tell everyone of the listeners that they should do that too.

::

They should learn the direct to seller marketing game.

::

That's the best way to find deals, but if you are busy, you have a full-time job and a family and you don't want to.

::

Get into the marketing business.

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No, it's OK.

::

Leverage other wholesalers so we leverage marketing and wholesalers to find deals.

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Right next we're going to leverage hard money and private money lenders to buy the deals.

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I don't swing a hammer, I'm going.

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To leverage general.

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Contractors and subcontractors to fix these properties.

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For me and I used to do my own property management, but I'm way too lazy to do that.

::

Nowadays so I.

::

Hire property managers and I leverage property managers.

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To do the leasing.

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And the and the maintenance requests and the rent collection.

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And if anybody gets later behind it, we got to get them out of there.

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I leverage them.

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To go help with all those efforts.

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And then last but.

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At least we leverage the long-term cheap bank financing to position this asset for a long-term play, so they pay back that private or that hard money lender.

::

So, leverage is basically built into every single.

::

Step of the equation.

::

So, one of the things that you brought up here, now a RV.

::

And and the cost of the rehab, which were the cause of your three failure?

::

You know I shouldn't call him failure.

::

There's your problems, their lessons, those are, frankly, some of the most volatile things.

::

There were lots and they were often yeah.

::

Now we're dealing with a kind of an economy situation here right now.

::

How are you dealing with the volatility regarding inventory?

::

And for that matter the cost of the rehabs?

::

That's a great question, so the cost of the rehabs has gone up, and that's due to two things really.

::

It's due to materials being.

::

Are expensive and it's also due to the cost of Labor going up. That's inflation 101. Everything is going to cost more, right?

::

The purchasing power of your dollar is going to be a little less, so we know that we see it right when we go into Home Depot, and we buy plywood or drywall or paint.

::

We see that that price is more expensive than it was two years ago.

::

So, we factor that in.

::

Right?

::

And when it comes to inventory, that's something that we can't really control.

::

So, you know we're going to have to make more offers today than we did six months ago or two years ago, to be able to get a deal.

::

But I can tell you this, I don't pay retail for properties.

::

In fact, I did for 10 years.

::

Remember when I told you guys that I was doing it the wrong way where I was locating the property and then you know making an offer via my agent?

::

These were all listed on the M LS.

::

I was paying full retail for properties right?

::

I did it the wrong way I'm.

::

Glad I did.

::

Because I wouldn't be here where I'm at today.

::

If I didn't but the new way of going about doing this is find properties at a discount, so you've got to buy properties at a discount.

::

And if you buy properties at a deep enough discount, ideally a minimum of 15, if not 20%, you basically are reducing your risk substantially. So, when I first started buying.

::

Properties at a discount I would look at the discount and kind of try to calculate how much money I could make off of the property.

::

Well now I look at it a little differently now.

::

I say hey, is this a big enough?

::

Discount where I can screw up my RV, screw up my repairs, maybe make maybe take two or three months longer than anticipated, and can I still break even on this deal?

::

And if the answer is no, then I'm not binding that enough of a discount.

::

So, if you buy at a discount, you can reduce your risk.

::

You can mitigate your risk and then when it comes to the rehab.

::

Which is another part of your question you.

::

You just you don't.

::

Want to be overly optimistic and think you're going to be able to go in and do painting carpet for two grand?

::

It's not going to happen.

::

The paint alone is going to probably cost you 2 grand and the carpet is going to probably cost you another two if not 3 grand, so you know just don't be overly.

::

Optimistic and if you're brand new, get bids.

::

Good quotes bring another experienced investor in your marketplace and to look over your shoulder and see how you're doing and if you are experienced.

::

Just don't get a big head and overly opt in overly optimistic about the fact that you may get some crazy RV that you can replace.

::

You know, repair, rehab, renovate that property.

::

Those are all the same things, essentially for less than the true cost, so I guess the best way to answer that question is just be realistic and the more and more you do this, the better you're going to get at it.

::

Great question.

::

So just to remind everybody, one more time, head over to Wholesaling Inc.

::

Com slash rentals.

::

Uhm, I wanted.

::

I was hoping you could share one more thing with you.

::

I asked you about your give us an example of your of your biggest problem and and what you learned from it.

::

I'd like you to share with us a story about one of your students and in a home run that they made.

::

Like where did you do you?

::

They started off not knowing anything.

::

And share with one of us one of your students' successes.

::

Yeah, absolutely.

::

So, I got tons of students and they all have lots of successes.

::

But you know, one of my favorite successes and I see this a lot is somebody will buy a property or get one under contract and they will say hey, this is great.

::

You know I can wholesale this, and I can make like you know, 10 grand.

::

For example, maybe.

::

Even:

::

Months, would you like to own this property with none of your own money and?

::

Then make $400 a month forever.

::

Right?

::

And oftentimes they say, hey, I don't necessarily need the 10 grand if they need it wholesale.

::

It no problem.

::

Make the money.

::

I want to help you do that too.

::

But by creating passive income from this rental property, you don't have to be stuck on the transaction.

::

Treadmill and I love teaching people this and opening their eyes.

::

This to this.

::

I have 92 units right now in My Portfolio and that portfolio spits off about 20,000 bucks a month.

::

So, if I don't, you know, want to work for a week or a month or a quarter.

::

I don't have to.

::

I got 20 grand a month coming in from my rental properties.

::

I love doing deals.

::

I love buying and wholesaling and fix and flipping.

::

But I'm not required to wake up every day and rush to the office to go do the next deal because My Portfolio pays me if I'm in town or not.

::

If I'm awake or asleep, it's still producing capital, so one of the best successes is that I love seeing my student.

::

You know accomplish is to get into the rental game and to use the bird method because the bird method will allow you to acquire these assets with little to no money.

::

And again, often sometimes.

::

Get paid to do it, so I just.

::

Had a student.

::

Maybe a week and a half two.

::

Weeks ago, his name is.

::

Derek good buddy of mine.

::

He bought 2 rental properties, fixed them up, got him rented and he went to refinance and pulled out $10,000 above and beyond what he had borrowed to buy both of those.

::

They were again rehabbed properties, in great shape, was able to charge very good rent, market rent or above.

::

I was able to get them appraised for a nice healthy number and acquired 2 assets and got paid $10,000 to do it.

::

Now if he would have bought those two and wholesaled them, he would have probably made 10, maybe 15,000 from the wholesale, but he now owns these still and still got the 10,000 bucks and every month.

::

Each of these properties pays in between 3:00 and $500. Let's average it at 400 a property.

::

He's got two of them. That's $800 a month. He's getting to put in his pocket, and he still walked away with 10,000 after the refund.

::

No, I appreciate you sharing that story.

::

Well David this has been a great conversation.

::

I really appreciated your time here tonight.

::

Again, head over to Wholesaling Inc.

::

Com slash rentals. For more information, check out Dave's podcast. I mean, it's all about Burr. Method Mastery is even on if you're watching this on YouTube.

::

You can catch that there, but really appreciate your time.

::

David, before I let you go, is there a thought or question you wish we would have covered here tonight?

::

You know, not really.

::

We covered a lot of it.

::

You know, I would say the only other piece of advice that I really want to give.

::

People is.

::

You don't have to have a bunch of money.

::

To do this?

::

And you don't have to have perfect credit either.

::

Now you can't have a 300-credit score. Let's be realistic. You gotta get a bank loan in the end to be able to exit.

::

These right?

::

And oftentimes the hard money or the private money lender is going to do some due diligence.

::

On you as.

::

Well, but you.

::

Don't need to have $30,000.

::

To buy a rental property, right?

::

You may only need to have 5 or $10,000 liquid to get this loan, and if you buy it at a discount and you fix.

::

It up and you follow.

::

The strategy the method right in the end.

::

You can acquire the asset with very little to no money.

::

And here's the thing.

::

This is super scalable right now.

::

I think I maybe have eight or nine or maybe even 10.

::

Projects somewhere within the bermet that I'm either buying them.

::

I'm in the rehab process.

::

I'm in the leasing process.

::

I'm in the refinancing process, so.

::

It is very.

::

Scalable, but at the end of the day, and I think you said this earlier, maybe not this exact phrase, but you meant it.

::

You make your money when you buy.

::

You get paid when you sell.

::

So, if you're able to learn how to buy properties at a discount, either direct to seller marketing.

::

Or from piggybacking off of the other wholesalers in your market.

::

This strategy is.

::

Very, very scalable.

::

And it's not difficult at all, and as a coach and a mentor to mice too.

::

Since I make it my goal in my mission to help them get in into these, you know type of deals and exit the deal with little to no money in the end so.

::

So, well, I, can I?

::

I just really appreciate your time David, you're welcome back anytime.

::

I hope you'll take me up on that fit for.

::

I mean, we could have kept going next thing you know, we would have been an hour and a half.

::

Into this, so I really appreciate your type of name.

::

That's right, what's that?

::

Hey, thanks for.

::

Listening, uh, I really appreciate you having me on the show, and you know my goal.

::

As always when I'm podcasting and I'm a guest on somebody show is to just provide as much value as I possibly can.

::

So, I'm confident that you know I provided value to the audience today.

::

And again, I really appreciate you having me on today.

::

Thanks so much.

::

Yeah, really appreciate it.

::

Thanks, Sir.

::

If you learned at least one actionable step to incorporate into your real estate investing.

::

If so, please consider returning some of that value by leaving a positive review, subscribing to our YouTube channel, or joining our growing network on Facebook and Twitter.

::

You can find links to all of our social media accounts in the show notes.

::

See you next time.