this is the real estate rookie episode 33 ner hey what's up this is David Green the host of the Bigger Pockets real estate podcast and today I am on the rookie show taking over the rookie feed to share a presentation of buy rehab rent refinance repeat or Burr in this episode we're going to cover what makes a great bur deal whether today's market is good for bur investors or not and if Burr is the right strategy for you I'm going to be teaching you how to master the must knows for successful bur investing whether you're a first-time or a season Pro get the latest tips for great bur deals market suitability and finding the right strategy many investors have fast-tracked their portfolio growth Journey using the Burr and I am one of them the Burr strategy by rehab R and finance repeat can allow you to get the most out of your capital and reach Financial Freedom in years instead of decades but with today's market conditions bur investors need to be more focused than ever on correctly running the numbers projecting expenses and estimating the after repair values in today's show you're going to learn mustn for any bur investor from from the bur guy himself me whether you're searching for the first burd deal or rehabbing your fifth you want to hear my latest tips and tricks for all bur investors so don't miss out during the podcast you're going to learn a little bit more about ways that Real Estate Investors evaluate deals to make sure you don't end up with something that loses money after you've done all the work if you decide that you would like to sign up for a Bigger Pockets Pro membership and get access to the calculators that we investors use to analyze our deals I've got good news for you because you're listening to this podcast and supporting Bigger Pockets I'm going to give you a discount code for 20% off of a yearly Pro membership so take a second to write this down or put a note in your phone to save 20% the discount code is onit 20 o wni T20 that's onit 20 all right I hope you're feeling chilly CU it's time to Burr welcome everybody I'm David Green the host of the Bigger Pockets podcast here today to talk with you guys about Burr in fact yesterday at my Jiu-Jitsu class there's a young man named Dylan Dylan if you're watching this what's up who uh knew who I was and was assigned to work with me and called me sirur which is my nickname given to me by my co-host Rob abas solo so I wrote the bur book which we will talk about later I've used the bur method to supercharge my portfolio and I'm here to talk to all of you today about how you can do the same so if you've ever heard this bur word you don't really know what it means you know it has something to do with repeating a process well don't worry by the time we're done today you're going to have a very good understanding of what it is how simple it is and how you can use it to use the same Capital to buy a lot of real estate so welcome I'm glad you guys are here I'm thrilled let's go over a couple ground rules first off get your phones out you don't have to put them away I want you to have your cell phones out while we are going through this and here's why there will be points in the presentation and I'm going to want you to take a picture of the screen so you can remember what we talked about so if you have your phone out and ready to go that will help us also you can follow me at David green24 I didn't cover that earlier but if you if you guys have a question after the webinar you want to get some clarity on something the best way to get a hold of me is to send me a DM on Instagram or Facebook all right what if I told you that you could make your Capital go further would there be any interest in that I mean is everybody here bleeding money out of their ears right now is it like man I got all this cash and I just need to find somewhere to put it well if you're not Pablo Escobar you probably don't have that problem you're probably looking for a way to take the little bit of money you do have and stretch it further which would be a good thing do you want to increase the velocity of your investing meaning do you want to make transactions happen more frequently do you want to reach your investing goals faster are you not wanting to need 50 years before you can save up enough money to buy enough real estate to become a millionaire well you can anyone here can using Burr by the end of this webinar you will understand why Burr works and the expert tips to follow all right let's get into today's agenda what we're going to be going over we're going to talk about some door prizes we're going to talk about why experienced investors love Burr we're going to talk about if Burr is the right deal for you finding a deal tools to help expert tips and tricks and we're going to analyze a deal together pretty cool so stay all the way until the end for expert tips and tricks because you don't want to miss those so who are we here at Bigger Pockets well we have over 2 million members we have the number one podcast for real estate investing in the world hosted by Yours Truly 5 million plus Forum posts these are questions that invest have asked and other members of the community have answered as well as 40 million total YouTube views and counting it doesn't take that many properties to Achieve Financial Freedom but it does take the right goals the right plan and the right actions so who am I well my name is David Green I'm a real estate investor and I live in the Bay area of Northern California I own rental properties I flip houses I'm a commercial investor I co-host the Bigger Pockets podcast with Rob Alis solo I'm the author of buy rehab rent refinance repeat the bur book longdistance real estate investing that's the first book I wrote for Bigger Pockets also the top producing agent series for Bigger Pockets which is three books written to help real estate and somewh houses those are sold skill and scale and like you I was once a newbie to real estate so let's talk about what Burr is before we get into it it's an acronym all right Burr stands for buy rehab rent refinance repeat and this is the order of operations when we're buying a property so first you buy a house then you rehab it to make it worth more then you find a tenant and rent it out to them to get cash flow then you refinance the property when it's worth more than what you paid for it to get a lot of your Capital back out then you take that capital and buy another property to repeat the process so why do experience investors like me love Burr well first off it's a low or a no money down strategy now you will still need money to buy the property but but if you do this well you will leave only a little bit of your money or get all of it out of the deal you will also increase your return on investment and that's because you're leaving such a small amount of money in the property but you're still getting cash flow that the Roy and the money that you leave in there is astronomically High you will get the most out of your Capital so your money is going to be working hard for you just like you had to work hard to make that money you'll increase the velocity and the efficiency of your investing which means you'll buy more properties and you will buy them better than if you were not doing Burr and you will supercharge your wealth you will get wealth faster still using sound fundamentals of real estate investing so is Burr right for you do you like what you're hearing so far well here's some things to consider before choosing to Burr first off are you willing to do a rehab and are you going to hire it out do you do the work yourself or are you going to pay a contractor or a handyman to do some of this work cuz most Burrs involve fixer uper properties which mean there will be a rehab whether it's light or extensive there's still a lot of work they require solid skill planning to find a deal so we're going to share some great tools later that make this possible for anyone to do but know when you're burring you have to find a better deal than when you buy traditionally to make this work which is one of the reasons I like it is it forces me to buy better but it is going to be harder work and here's some of the potential cons of Burr well first off you're usually going to use a short-term loan to buy the property this could be a hard money loan it could be private money we're going to get into some of the different ways you can Finance it then there's the problem that you may have a low appraisal after the rehab so you're going to learn in this method you buy a property and then it has an after repair value what you think it's going to be worth after it's fixed up well sometimes it appraises low and that messes up your whole plan for pulling your Capital out of the deal you're going to end up with a rehab that ends up over budget that can happen too so you plan to spend say $50,000 for the rehab and it becomes $775,000 that can mess up your numbers there's a seasoning period right traditionally it's been 6 months for conventional financing now for some it's up to 12 months so it can be hard to refinance that property until you've waited a period of time so if you thought you were just going to do this every three months that can be tough depending on what kind of loan product that you're using there are two potential closing costs so you may have closing cost when you first buy it as well as closing cost when you rehab it that's an added expense and then the rehab itself is stressful it can involve pulling permits it can involve talking to a contractor it can usually go over the timeline rehabs are notorious for being headaches and when you're buying fixer properties that's a part of what you're buying so it does have a lot of downsides and now that I think about it it's probably better that we don't talk about bur I mean if something's hard it's usually bad like eating vegetables is hard lifting weights is hard exercising is hard raising babies is hard I changed my mind I don't think we should be doing this at all actually no that's terrible in fact we have the word nope written in cursive with paint that was very very impressive whoever wrote that on this hardwood floor that's actually a really good nope but nope we're not going to run away from things that are hard hard Burr has propelled many including myself towards Financial Freedom and I believe that anyone here can do the same so how do we work around the cons well first off remember that every strategy has unique downsides how do we address them right how do we address the short-term loan well you can use a hard money loan to buy the property but you're going to have additional closing costs so know that when you're getting the loan you should contact a mortgage broker I own the one brokerage so we can help you with that you may have a relationship with the mortgage broker you want to ask questions like what financing options do you have available for short-term debt this is not a 30-year fixed rate loan on the property this is a loan that you want to get for a shorter period of time then there's the low appraisal after the rehab well you want to plan your rehab well and you can contest T appraisals in fact owning a mortgage company gives me an advantage there sometimes We'll order an appraisal and it will come in low and we'll go to a different lender and have a new appraisal ordered instead sometimes we'll contest the appraisal and say hey I think your guy messed it up here's some comps we should consider and they may uh redo their original appra appraisal and the more you do rehabs the more confident you get with knowing what to do when they go wrong you also have the problem of the rehab ending up over budget right there's no around it you just have to have access to extra money in case that happens then you got the seasoning period right one of the ways that we address that problem is we don't always refinance into conventional loans sometimes we refinance into a dscr loan or a bank statement loan some of the other financing options that or a portfolio loan that don't require you to wait the full 12 months and again that's a mortgage broker question if you work with a mortgage broker they have many different banks that they can find you financing for versus if you work with a direct lender they usually have one bank with one program and if you don't fit within those parameters then they're not going to be able to help you and then it comes to actually doing the rehab how do we address that well something that I need to highlight about Burr especially if you're not familiar with real estate this does not work when you pay fair market price for a property or you don't add value through the rehab this is a method for buying a property below market value and or adding value to the property through the rehab upgrading it adding square footage to it fixing problems that someone else didn't want to fix it this is something that you only do when you can get a property for less than what it's worth this doesn't work for a turnkey property that you're paying fair market value for there'd be no way to get your Capital back out of it you're actually trying to create Equity when you buy this property and fix it up and then take that Equity out and put it back as cash in your bank to invest into the next deal so that's another important thing to highlight that the bur method is not something you just choose to do on some condo in an area that you love and you paid what it was worth this is something that's going to take a little bit more work to find the better deal so let's talk about how to find the right deal okay well you've got networking and BP can help you there you can go to real estate investment groups that's a way to meet other investors or wholesalers that are actually people out there actively looking for really good deals putting them in contract and then assigning those contracts to you you can go to meetups these are places where people go and they get together and they talk about their businesses and they talk about what they're investing in and they build relationships you can get on the forums like I mentioned earlier Bigger Pockets has forums with all kinds of different deal finders or agents and different people that you're going to need in the transaction all conversing and having conversation or you can tell your family and friends hey I'm a real estate investor I am looking for someone who needs to sell their house especially if it's ugly a hoarder house death in the family something that wouldn't work great to put on the MLS and sell for the maximum price possible you can do what we call driving for deals now this is a method where you get in your car you drive around neighborhoods maybe you're an Uber driver and you do this while you're working maybe it's when you're on your commute maybe you're taking your kids to swim practice and as you're driving through residential neighborhoods or when you're waiting for practice to end and you're driving around listen to the Bigger Pockets podcast or Bigger Pockets on YouTube you look for properties that are in terrible condition you want to find something with overgrown grass boarded up Windows clearly deferred maintenance something that lets you realize that owner isn't taking care of their property and maybe more inclined to sell it then you look up their information using skip tracing technology and you send them a letter or give them a call or an email or whatever you do and you say hey I'd like to buy your property can I make you an offer there are wholesalers this was one of my favorite methods when I was when I was kneee in Burr is I would find people that had deals under contract for less than what they were worth and I would buy it directly from the wholesaler and then I would do my rehab I'd also look for three kinds of distress I talk about this in my book pillars of wealth that will be coming out for Bigger Pockets the first is Market distress this is when a a entire Market is in a bad position something during the recession if you were buying houses in 2010 we had a lot of Market distress there was a ton of properties for sale good time to buy you also look for property distress this is like when I was saying driving for deals you're looking for a property that is clearly in bad shape and other people don't want to buy it because of its issues then you look for personal distress that's when a human being is in a bad point they're facing foreclosure they need money for medical bills there's something going on in their life where or maybe they're going through divorce they don't want to deal with it anymore they just want to get rid of a property easily that's something investors can take advantage of you've also got investor friendly agents PE agents that are good at finding deals for you on the MLS and negotiating them Bigger Pockets can help you do this with agent Finders so if we you go to the Bigger Pockets uh website and then you click on tools you can click on agent finder and find an agent in your area that can help you now if you're in my area Northern or Southern California you should definitely email me reach out to me because I can help you but if you're not near me Bigger Pockets has a great way for you to find another agent that like you enjoys Bigger Pockets and speaks the language so what makes a good bird deal first off you should read the bird book for all the tips and tricks but while you're here I'm going to cover some of the big ones first off you want to buy under market value you want to get that house for as far below fair market value as you can possibly get the seller to agree to there's some rules of thumb you should look at okay the 1% rule is a rule that states the property should rent for around 1% every month of what you paid for the house which means if you pay a 100 Grand it should rent for around $1,000 a month if it's close to that it is likely to cash flow and not a waste of your time now the 70% rule is another helpful Rule now this is a rule that says you should try to buy a property from a owner for about 70% of what it would be worth after it was fixed up so you take 70% of what you think it's going to be worth after it's fixed up you subtract your rehab cost and that's where you make your initial offer to start your negotiating now that doesn't mean you have to follow these rules to a t but they are guidelines that give you a framework for where to start when you're considering pursuing a deal also remember that appraisals can vary by location okay so if you look at a four-bedroom house on one side of town versus a four-bedroom house on another side of town it's very possible that one of them will be worth more than the other because it's in a better side of town so remember it's not just by city it's actually by neighborhood when you're looking for comparables to determine what a property is going to be worth after it's fixed up and then you've got reab best value ads okay like we all know you can fix up a kitchen you can fix up a bathroom you can make a property more desirable but did you ever think about adding a bedroom did you ever think about buying a two-bedroom home that has 1400 Square ft and converting the bonus room the den the living room into another bedroom or two if it has living space like a family room already this is a fast way that you can take your two-bedroom house and have it compared to three and four bedroom houses by adding bathrooms same for creating more livable space maybe you have an attached garage that's not being used for anything maybe you have a a covered patio that's really big not being used for anything you can actually wrap that into the house and create another Mass bathroom move the kitchen to that part of the house adding square footage to small homes is a great way to add value to the property now remember that 99% of the properties out there are not really deals you have to analyze for the best one so let's analyze one together we're going to take a minute here and we're going to go to biggerpockets.com and I'm going to show you guys how you can actually analyze a deal right here's the one we're going to analyze we've got a nice cute little house now this looks like it's a single story but it actually has a basement you just can't see it from this picture right see the dining room here living room here looks like it's in pretty good shape just could use a little bit of updating maybe replace the carpets maybe give it a Fresh coat of paint uh you can tell it's in a pretty nice neighborhood here like it's it's a got some good bones I can tell from looking at this thing it is a 1950s Ranch up down duplex meaning it has a basement that has already been converted into the Lower Side the purchase price is 220,000 that's what we're going to try to buy this thing for the rehab is 50,000 that's what it's going to cost to turn that uh bottom unit into something that is more livable to upgrade it and when we're done we should have an arv meaning an after repair value this is what we think the property is going to be worth of $350,000 okay so to run through these numbers we're going to try to buy it for 220 we're going to put 50 in fixing it up to Spruce it up make it worth more and then we're hoping it's going to be worth 350 when we're done the estimated rents from unit 1 are going to be be, 1600 and unit 2 are going to be 1,600 and property taxes we assume will be about 220 a month and this is what unit 1 looks like we've got a mud room remember I told you to look for uh square footage that's not being used well that mudroom could probably be converted into um either additional living space we could take a bedroom that might be next to it and make it bigger we could take a bathroom that might be next to it make it bigger we can add another bathroom here if the mudro is not being used for anything sometimes you can knock down a wall and there's a closet on the other side and you can make this into an actual bedroom whatever you do you want to take space like mudrooms that aren't being used for anything useful and try to add them into the square footage of the property in a better way then we've got the kitchen here right we can tell it's a little bit outdated we can probably Spruce that thing up and then as you see the bedrooms are fine they've got some pretty nice hardwood floors but they might need some paint and definitely some new window coverings this is unit two it's a two bed one bath so you can see there's already a bathroom in the basement and there's a bedroom in the basement you can see that they had a uh renovation that they were doing but had water damage and drain issues so they had to stop now when I'm looking for properties on the MLS I love seeing pictures like this this is what I want to see because this scares away other buyers but I just see that a lot of the work has already been done we just have to go put in some drywall we can make this thing look pretty the basement also has a wreck room and a utility room right so there's a lot of square footage here that we can try to use for better purposes I like that the more square footage that I see and the lower the price of the house the better so this is a very good bur candidate so we're going to switch over to bigger pockets.com we're going to use the Burr calculator and I'm going to show you how Bigger Pockets has tools that can make analyzing properties much much easier so all we're going to do is head over to the Bigger Pockets website we're going to hover over tools then we're going to go to calculators and we're just going to roll down to Burr see how easy that is we're going to hit start new report the report title is going to be called up down duplex in this case I don't know that we actually had the property address but let's say that you found this thing online somewhere this is where you would type in the property address so that you could just remember okay this was the property that I was running we're going to say this is in Denver Colorado because that's where BP headquarters are remember the annual property taxes we already know were 220 but what if you didn't know what they were right that can be intimidating when you're a newer investor you don't know how to calculate that you're going to click on this little guy right here this will tell you how to find what the property taxes are for an area so anytime you come across one of these boxes and you don't know what to do you hover over the question mark and it will tell you what you're supposed to be putting into that um box we could add a photo if we wanted in this case we don't need to but you may want to put in a property description t night 1950s ranch style up down duplex with basement value ad potential lots of square footage that's something you could do to remind yourself when you're going over these past reports which property you were analyzing you can click on other property features here and this is where we could put in well it was a four bedrooms and it was a total of say four bathrooms right you can put this information that will remind you more of the property that you were analyzing because you're probably going to do this for lots of different properties all right pretty cool Bigger Pockets makes this very easy hit next step and now we're going to put in the purchase price we're going to try to buy this thing for 220 the after repair value is 350 the purchase closing costs are going to be around let's say probably $5,000 don't know what those are hover over the little question mark here right typically they are 1 to 2% of the purchase price of the property but this case we're going to go a little bit higher the estimated repair cost was $50,000 now we could just walk the property with a contractor and ask them what they think it would cost to fix it up that's the number they're going to give us purchase loan details now there's different ways you can buy a bur we talked about using private money hard money cash um lots of different ways right so in this case let's assume that we have our primary residence we took a helck on that we're going to use the money from the helck to buy this thing so we're basically using cash from our HELOC that we're going to be using okay we are planning on refinancing this property after 12 months that's when we think we're going to get the money back and we're going to give ourselves an estimated rehab time of two months to do this work now let's talk about the refinance loans this is after the work is done what are the terms of the loan that we are going to go get well first off our loan amount is is going to be 80% of the $350,000 that we think it's going to be worth right most banks will let you borrow around 80% so let's take the 350 * 8 is $280,000 the interest rate on that loan we're going to assume on an investment property is going to be 7.5% and are other refinance closing costs probably another oh you know what 5,000 I think I put 5,000 for closing cost to buy the property yeah so we're going to have another 5,000 when we want to refinance it are there any other loans fees and points right well let's say that if there was we would wrap them into the loan or you can choose to pay them out of pocket however you click there is how the calculator is going to determine extra cost you have for closing costs uh this is not an interest only loan so it's going to calculate the principal and the mortgage and it's going to not have PMI because we're leaving 20% of the equity in the deal by only pulling out 80% when it asks you how to amortise it we always want to use 30 years that's the best loans to use and we can skip this typical cap rate for the area that's more for commercial property so we're going to hit Next Step total gross monthly rent well we calculated this and each unit we thought would rent for $1600 Okay so that means it's going to be 3,200 now if you don't know how to calculate what the rent's going to be when we clicked on tools and went to Burg calculator you can also just go to rent estimator and Bigger Pockets has an actual software tool that will look up the address of the property you're looking at and tell you approximately how much it will rent for a month and then other monthly income this is where you would put any information if the tenant's paying you for laundry or something else in this case they're not going to be fixed landlord paid expenses some areas require landlords to pay the water the sewer the electricity the garbage or maybe they don't always require the landlord to pay it but it's written into the lease that the landlord will pay that not the case in most areas though so in most people where you're living the the tenants are going to pay for their own water sewer electric uh garbage uh ho now they wouldn't pay the HOA fee but uh they might have renters insurance right so you don't have to worry about that when you're the landlord in most cases uh the property taxes we might have done something wrong yeah I guess we calculated them at 220 a year I don't think that's right though I think we need to fix that it should probably be 220 a month I'm going to guess so that's okay we will click on previous step okay now this will happen and it happens for the best of us when we're analyzing properties where we either enter the wrong information or we make a mistake the Bigger Pockets calculators make it very easy to fix that so the property taxes are $220 a month I put them in as $220 a year that $220 a month it actually comes out to 2640 right so I'm just going to change that number make that 2640 then I'm going to click on the next here we go we're just going to pick up right where we left off don't have to worry about any these fixed landlord paid expenses uh don't the variable landlord paid expenses we will have to pay now this is where we budget money for things that could go wrong so we know at some point we're not going to have a tenant in the property so we're going to have a 5% vacancy that means we're going to take 5% of the rent and we're going to budget that for times when nobody is renting our proper property we do the same thing for Pairs and expenses we typically take 5% of the rent we say that's how much we're going to put towards things that break in the house Capital expenditures are when you set money aside to pay for big things like the roof going out the air conditioner going out uh the water boiler uh big expenses of things that are going to break so we can budget money for that and then if you have a property manager like you're not managing the property yourself you set money aside for management fees in this case at this rent range probably around 8% is what you can expect to pay that's about it folks as I've walked you through how to do this it's still only been about 5 minutes of time it took to run through this entire thing so let's hit calculate results all right now the calculator does all the work and gives us the results this is two3 Main Street in Denver Colorado a four-bedroom three-b property with two units one up one down each Runing for $600 that we purchased for $220,000 let's see what the numbers look like like here now that $286.22 th000 in closing cost we see this on the leftand column we had estimated repairs of $50,000 the total cost what we paid for the house plus the repairs plus the closing cost was 275,000 and then we had an after repair value of 350 which means when we got an appraisal after this was done the bank said it's worth $350,000 okay they're going to give us a loan for 80% of 350,000 which is the same as if we bought it and put 20% down to the bank it doesn't matter if it's equity in the deal or if it's money that you bring to the closing table they just care what percentage of the property's value they're giving you the loan for so in this case we got a loan after we were done for 280,000 but remember the total project cost was 275,000 they gave us 280 which meant they gave us five grand more than what we put into this deal we ended up with more money after we did the deal because we bought it at such a good price and because we added value through the rehab so well which means our cash on cash return cannot be calculated because it's infinite there is no cash left in the deal in fact we got cash out of the deal and we're left with $286 a month of cash flow this is how people like me took the same money and kept reinvesting it and reinvesting it and reinvesting it over and over and over adding more properties to our portfolio with the same capital okay so you've added some Equity to your net worth you've added some cash flow every month you got your money back you can go buy another property and if you're someone that likes numbers if you scroll down on this calculator you can see what your total annual income would likely be in year one all the way through year 30 assuming that rents or Val property values go up by 2 to 3% a year all of this is made very easy by these Bigger Pockets calculators so if you're intimidated by numbers you don't have to be you just have to know where to find them and how to put them in the box and the calculator will do all the work for you okay let's get back to our presentation here now that you've seen just how simple it can be to analyze a bur possible project now here's something that's cool even if you are not a pro member if you just have a Bigger Pockets profile you will get your first two calculator reports for free so you can use that calculator anytime you want just for having a Bigger Pockets profile two simple questions I want to ask you do you understand how Burr can help supercharge your investing Journey does it make sense why this supercharges how quickly you acquire properties it's because you're not saving $85,000 and putting a down payment saving $85,000 and putting a down payment taking Equity from a property and putting into the next one and then being no more Equity to invest you are putting money into properties growing money within the property you just bought because you bought it for less than what it's worth and you added value through the rehab taking that money out of the property and then buying the next one that supercharges how quickly you can acquire properties and this works best if you're making and saving money all at the same time that you're doing these projects do you believe that if you have commitment knowledge and tools that you can reach your investing goals now you can't do it without that if you don't have the knowledge to do this it's not going to help and if you don't have the tools you can have the best intentions but you're not going to get anywhere if you don't have the commitment that you're actually going to commit to doing this and go through well you could have the knowledge and the tools and it'll be useless you really need all three and as you're listening to this I just want to ask do you have all three are you committed to putting your money into real estate so it can grow and spending less of it on things you don't need are you committed to gaining the knowledge that you need and listening to more webinars like this more podcasts like this more books like this so you can do what I did and are you committed to getting the tools that you're going to need in order to take this commitment and this knowledge and put them into practice okay if you really want to do something you'll find a away and if you don't you'll find an excuse now you guys can tell me maybe in the chat yeah David I'm committed or no I'm not committed but you know it's crazy even if you didn't tell me I would know if you were because if you are committed you'll find a way to get this done and if you're not committed you'll find a way to make an excuse why you didn't get this done and that's how simple life can be people don't become millionaires by accident people don't hit Financial Freedom by accident people don't get in good shape by accident people don't get six-packs by accident they do it by eating carefully working out the right way being committed to a process now if you want to be a financial Fitness person if you want a money sixpack if you want a portfolio six-pack you're going to do certain things to make it happen just like people that are into fitness do certain things to make their body look the way it does if you answered yes to those questions let's look at some tools that can help you minimize risk increase confidence in a deal and blast off into success the biggest one is going to be bigger Pockets Pro this will be the best bang for your buck if you're committed to making money in real estate investing it is a One-Stop shop to start scale and manage your portfolio Bigger Pockets Pro will allow you to analyze investment properties in minutes and determine which ones are worth pursuing with unlimited access to an analysis calculators and rent and Rehab estimators now you saw what the Burr calculator looks like there's also just a traditional rental property calculator there's a lot of different tools on there I only showed you one of them but there are many this is an example of what kind of reports you can get when you use the Bigger Pockets calculators very easy to read and very easy to use there are rehab estimator calculators so if you're trying to figure out how much it's going to cost to a rehab on a property we got you you put all the information in there and it's going to give you the report it will help you become a better investor with curated video content and webinar replays covering everything that you need to make smart Investments you also get access to Pro exclusive videos now Bigger Pockets has a lot of free content content but these are videos exclusively for pro members that not everybody else has access to that when you join in you get to watch these videos we have a couple examples here on tax benefits multif family private lending things that the experts use to grow their portfolios that you can learn about you'll get access to the investing with no or low money down workshop this is some of the best content I ever made with my best friend Brandon Turner we hung out at his shed in Hawaii and we got into some really good stuff including the bur method for how to invest in real estate with no or low money down a $200 value which is yours if you're a pro member you will get access to the finding great deals masterclass where Brandon sat down with Elliot Smith Nathan Brooks Lance Wayfield and Nate Robinson and went over door knocking Direct Mail marketing relationships and driving for deals a $990 value where you can learn from some of the best in the business at their respective strategies only available for pro members as well as the book on the best ways to find real estate deals for investing success by Brandon Turner you get to show the community that you meet business with your pro badge so this here is Blaine algar when you see his profile you know he's not just a lurker hanging around looking through the window at the other people working out but he's in the gym grinding sweating and building a better Financial body you'll get to save time and money and minimize your risk with lawyer approved lease documents for all 50 states so you can make that deal we just like looked at even better on the numbers by managing it yourself and if you like to property manage or that's something that you want to do yourself to save money we have forms that you can use that are lawyer approved for all 50 states that you can have your tenant sign uh that will function as a lease standard lease agreements you can save thousands of dollars on tools and services that you'll use in your real estate business with Bigger Pockets Partners like rent ready and envelo rent ready is free property management software for pros if you're not pro you're going to have to pay for this but this is some of the best in the business when it comes to managing properties you'll also get discounts on air DNA in case you want to analyze short-term rentals or Keystone own CPA Inc that can help with real estate strategy tax planning if you use inel when you sign up you'll also get a $50 credit for marketing cost to send letters with the envelo software plus you'll gain access to our discounted 10-week educational boot camps those are only available to Pro members and they're only $225 per course but if you're not a pro member you can't take them at all this is only for the committed we've got a rookie boot camp a multif family boot camp a short-term rental boot camp a Rie landlord boot camp a house hacking boot camp lots of cool stuff there only available for pro members but what's the number one reason to consider going pro it works you've got Aaron C here who's a bigger Pockets Pro member that says the BP Cals are my go-to for analyzing potential properties there's no way I could analyze the volume of properties I do without being a pro member I locked up my first three unit almost a year ago that I'm now selling for almost a $70,000 profit that will go towards something larger the BP calculs were a huge factor in making sure my numbers were right Patrick M says back in June I attended one of your webinars right afterwards I signed up for Pro in the next couple weeks I analyzed a bunch of deals eventually I found a fourplex I got it under contract three weeks after signing up for pro and a week later I closed on another property that was six units big thank you to you and the entire Team final quick tip sign up for pro annual I made my money back at the closing table so how much is Bigger Pockets Pro well here's what's crazy it's only $390 a year that is less than the cost of a home inspection on a single property okay of all of your expenses in real estate this one is one that barely even makes the radar it's almost insignificant compared to the normal expenses that we have when you're buying a property I mean you saw the numbers that we were putting into the calculator for buying a property closing costs rehabs that's not going to be including the home inspection the pest inspection the roof inspection if there's a pool you might have a pool inspection a foundation uh there's the notary signing it can be around the same cost as this okay like buying property you're going to have transfer taxes you're going to have title fees escrow fees there's a lot of money that goes into real estate investing which is what allows you to make money out of it but the Bigger Pockets Pro membership is only $390 a year and because you're watching this webinar we're going to give you a discount of 20% Which means if you sign up now it's only $312 a year okay it's getting ridiculously cheap I don't know how Bigger Pockets is able to offer this at the price that they do maybe I guess it has something to do with the the level of commitment that the members have but like this is a very very very good price for getting access to everything I just showed you all the education plus the calculators that help you analyze deals so use that code onit 20 ow WN it20 to save your 20% off on a BP Pro membership now just a reminder if you sign up for Bigger Pockets Pro you're going to get the pro membership Plus $2,000 worth of bonuses 20% off your first year of pro annual membership a $78 value Pro exclusive video workshops a $1,500 value the lease agreements templates which are about $100 per state and you're getting 50 of them a free rent ready Property Management subscription a $239 Value Plus unlimited rehab and Rental estimates analysis calculator reports and a profile badge all for signing up you just got to use the code onit 20 o WN it20 at bigger.com proo so I'm going to give you guys a minute while we're here I'm going to keep talking so you can still hear me but I want you to open a second tab if you're using Google Chrome just hit the little plus sign at the top where all your Tabs are and once you've opened up that new tab I want you to type in biggerpockets.com slpro it's going to take you to the website where you can sign up for the pro annual it's going to give you a couple options I want to make sure you get your 20% off okay so remember you're going to to click on Bigger Pockets Pro annual and when it asks you for the discount code there's a little box put ownit 20 and you should click a button and it should tell you that it worked want to make sure you don't miss out on that discount if you're serious about wanting to start making money through real estate and you need Bigger Pockets Pro to do it what if you're already a pro well everything that I just mentioned you already have access to you might not have known just go to bigger pockets.com slpro svideos and you can see everything that we talked about you can you also find the boot camp info@ biggerpockets.com booot camp now what if you sign up and you decide you don't like it David I actually need that $312 for the year because that can buy me you know like 70 cups of coffee and that's more important than becoming a millionaire in my future okay I hear you don't worry give Bigger Pockets Pro a try for up to 30 days and if you don't love it you can email support at biggerpockets.com and get a 100% refund and you can still use everything else on the site this is a no-brainer guys if you're not already a pro member you need to go do it right now and if you are a pro member you know why I'm saying this is great look at all the different people that already love their Pro membership there's a ton of them this is why you see the people with the badge on their name that says Pro mine says premium right even I've set up this with Bigger Pockets you guys can do the same and I hope that you do remember the late great Jim ran if you really want to do something you'll find a way and if you don't you'll find an excuse if you want a sixpack you'll figure out a way to get it if you want to be a millionaire you'll figure out a way to get it if you want Financial Freedom you'll figure out a way to get it I'm just sharing with you the way that I did right I walked myself to the top of the mountain and now I'm going back down to the bottom and I'm telling all the people that are down there looking up here's the path that I took here's the way I made the journey here's what I did when it got hard here's how I avoided the poison ivy I'm just trying to share with you guys the path that I took and I hope that you follow me on that a Bigger Pockets Pro membership is a great way to get yourself started and get on the same Journey cuz you're going to need these tools just like I did when I was climbing that same Hill so remember this is over $2,000 worth of Value Plus the membership for just $312 a year if you use the code onit 20 at biggerpockets.com proo so if you're signing up I want you to tell me in the chat how many of you signed up and are you excited to start this journey right now we're going to get into the expert tips and tricks that I promised you earlier in the show that we would do first off you should analyze deals with more than one exit strategy okay so let's say that you looked at this deal that we we did in uh Colorado this up down duplex and you buy it and everything looks great but the rents aren't 1,600 a month something goes wrong okay uh the there's a school that shuts down where this property was this was a great School District now nobody wants to rent there let's say you're only able to get $1,100 a month per unit it may not give you the cash cash on cash return that you want it may actually be losing money if that happens but you've added so much Equity to this property because you bought it right and you rehabbed it right that you can still sell it to somebody else and make cash that way that's an example of a second exit strategy maybe you thought hey I'm going to buy this thing and I'm going to put it on Airbnb and I'm going to get way more than 1,600 a month and so you go into it and it just doesn't work it's harder than you thought the neighbors complain the city shuts you down something goes wrong with your Airbnb plan okay rent it out traditionally for $1,600 a month and boom you got a second exit strategy this is something that the pros all do Target aspects of the rehab that increase the value of their property for the appraisers flooring and paint are two very very powerful ways to get a high Roi on the money you spent to make a property look much nicer Landscaping is another way that you can really oppress appraisers that you don't need to hire skilled labor for it's not like paying an electrician to go do landscaping you can find people that will do that work for relatively cheap or you can do it yourself and then focusing on the kitchen and then the master bathroom is huge and the last piece of advice is making it an open floor plan tearing down walls so that the property feels more open makes it more valuable choose coste effective value ads to increased arv okay one of the things I talk about in long-distance real estate investing is if you're going to be doing a small area like tile in a shower flooring in a bathroom backsplash on a kitchen I splurge for the really expensive materials to make it look really nice and the trick is I don't need very much of those materials so even though I'm paying five times as much for the materials my budget's only going from say $300 to $1,500 which isn't that bad when you consider that the labor is going to be the same whether I use cheap materials or not and labor is a bigger part of the overall cost so if I'm redoing a shower the quote might be $8,000 for labor right so I can either pay $ 8500 or 8,300 and use the cheap stuff or I can pay 9500 and get a beautiful shower the difference between 8,300 and 9500 is insignificant but the difference between a gorgeous shower and a plain basic model is going to hurt my appraise value does that make sense now if it's a material that I need for the entire property the flooring for the whole house I'm not going to buy the stuff that's five times more EXP expensive because if I have to buy a lot of it that's going to wreck my budget so I only use this tip and this trick for when I'm doing something in small amounts build a good relationship with a hard money lender because you never know when the deal is going to pop up and you want to be able to fund it quickly you can reach out to me and I will put you in touch with my mortgage company or you can go to bigger poo.com and click on network and you can look for hard money lenders that are approved by BP or you can just attend meetups or you can go on the forums and ask people do you have a good hard money lender sometimes you'll see HML is the acronym that people will use for that but finding one will make it easier to fund deals when you have to close quickly have your rehab budget laid out when you're analyzing your deal so as you're looking at the property itself make sure you have a good understanding of what it's going to cost to fix it up in the example we knew that the rehab was going to be $50,000 but it's hard to make an offer on a house if you don't know if it's going to be 50k or 150k have your final financing in the works early in the rehab process to cut down on your fees so what I would do is I would go to the one brokerage I would get pre-approved for my refinance once it's done then I would use different funding to buy the property and fix it up and then I'm already pre-approved when it comes time to do my refi so it's going to be easy and I'm already approved you don't want to get stuck paying a hard money loan and unable to refinance out of it always add an overage for your budget for contingencies assume things are going to be more expensive than what you thought and give yourself a cushion all right guys those are my expert tips and tricks for you I'm excited to see you guys on your journey let me know if you went pro on Bigger Pockets it's the best Roi you can possibly get in your career I don't know of a better deal that's out there I don't know why it's only $312 but I like it sometimes I don't understand why Netflix is so cheap but I know that I get a lot of value out of that Netflix right I end up spending like six cents for every time that I watch it some things in life are like that and you just got to take advantage of them so thank you for joining me today I really appreciate being able to teach you guys and I hope that all of you take this information and go apply it to make your lives better remember you can follow me on social media at David green24 there's e at the end of Green look for the check mark so you know that it's actually me you can follow me on YouTube at youtube.com David green24 I go live every single Friday night on my YouTube channel to take your questions or you can check out my website davidg green24 to see all the different things I have going on and how I can help you when you're done with this either listen to another webinar listen to one of our our podcast or go to biggerpockets.com go to the website and check out everything that we have to offer you there as well thanks a lot I will see you guys on the next one good luck to everyone all right I hope you enjoyed Today's Show and you learned a little something if you've heard other people talk about bird now you know why they're saying it or if you've wondered why do they keep saying bur because you've always thought it was BR r r r r it's true but they both mean the same thing all right if you want to be a BP Pro member you can save 20% off using coupon code own it 20 this is David Green I have hijacked the rookie show your regular hosts are going to be back next week so don't fear you can catch me over on the Bigger Pockets real estate podcast after this [Music] episode up your G nobody all this ch
