(Auto-generated Video Transcript)
what's going on everyone a bigger pockets this is brandon and i am going to give you a tour of my new vacation rental property this is just we've been working on this property for a while and in fact i did a tour here on facebook live back i don't know two or three months ago and it was still in the rehab process this has been a fairly slow rehab only because it's been our side project whenever we're not working on other flip stuff so anyway any of you tour real quick and around this is the house are here it is located in the town of aberdeen washington which is not exactly a tourist town / say about that basically my town obviously they're making a profit and there are virtually no vacation rentals in this town I mean really hardly any for a town of I don't know 30 40 thousand people and no vacation rentals but I'm really doesn't hotels my thinking is just they it hasn't come here yet so I'm going to try it out of a test it works great why waste if you don't know the furniture so all right Josh the wind is making it hard to hear let me go inside so this is the house right here we kept the front door we kept the siding to clean and sink clean things up a little bit and painted the ceiling and the door kind of cool blue color sounds cool side alright so this is the new vacation rental it's ninety-nine point nine percent done I still got like that was here today just check it out with a couple little things to do but this is the living room it is a two-bedroom one-bath house hoping to rent it for on average 125 a night I think I'll have to work up to that I'll be listed on Airbnb home away and some of the other sites soon what's up Shane new banks and anybody else who's walking it watching this hey my wife joined Julia what's up Brandon hey what's going on Josh Dorkin is here which is awesome Josh dorgan if you guys didn't watch our our fight me and Josh had a fight it's on our Facebook pages you guys take a look at it Brendan said love you guys you and Josh are an inspiration yes very nice to say can't get enough of your podcast thanks so what's up Jesse what's up everyone hey you guys do me a quick favor if your Facebook live videos if you're enjoying this walkthrough give me a thumbs up like click it like 10 times I like to see them come to your heart those are good too and it lets Facebook know hey this is a valuable we're gonna talk to more people what's up Shane and Justin hey there's some thumbs up okay let me give you a quick tour while I'm walking through this and all and if you think see things you like give me a thumbs up alright so TV I'm gonna hide this course still it's one things left to do we're actually put the whole the wall sweet hide record and we got cable and internet coming here in the next couple days Oh thorny is here thorny what's up let's see I'm walking through here so the first like the stuff we bought most of this stuff came from places like Ross TJ Maxx Marshalls that came from a friend of mine we just put on facebook hey is anybody have any extra furniture Kevin said nice house thank you hey by the way also guys hang if you guys enjoy this video as well and you want to share it I would love some shares because shares tell Facebook that there is value here and so the more value we get the better so uh zactly did you do it before video I did ya like months ago I did one I like that couch yeah this came from costco I didn't buy a lot of stuff new but that came new from costco this came from a thrift shop actually these two table chairs that came from ross that came new TV came new let's go BAM here to the hallway oh so as a part of the vacation vacation rental we're we're going to actually supply every single guest who comes here with to snicker bars two bottles of water that will have like label on where you take the label off the bottle of water put our own label on that just says you know pleasing you know enjoy our home blah blah blah and then probably will say you know like and if you enjoy your experience be sure to leave an honest review just something that people can take with them and be like like a little wow factor right now big believer in the wow factor and so we're going to do that I don't have to but that's gonna go right there and maybe even a couple bags of chips I mean it's like a dollar you know a guest I think it makes a big difference so coming in here we got two bedrooms and I pretty much identical I mean really like almost identical this is a by the way Jesse swaney just shared my video Jesse you are amazing Carl said Brandon's the man thanks Jeffrey what's up alright the Zachary Gwyn just joined you guys if you guys don't know Zach he's like the best videographer in the world he made that video that's on the Facebook page right now bigger pockets and these are full size beds I would have actually gone a little larger but all I could get like reasonably priced were full size not Queen so it's like four inches shorter than a queen I'm actually hoping that people don't mind that's not a bigger bed but anyway bathroom turned out really nice i thought i really like the way this turned out tile got done in here thought it turned out pretty good little decorative thing around the edge record he said are we to right through the whole house or by the room we rented by the whole house so my hope is turning 25 bucks a night we're kind of going with if you didn't notice we're gonna go with the Pacific Northwest theme so this is kind of cool within my wife bought and got like pictures for and so these are all Pacific Northwest photos of different around our area so there's like up in seattle public market there's the original starbucks there's like our beach our trees etc so kind of cool coming down the hallway this like I said the bedrooms are almost identical Jessie said did you do all the work ourselves no I actually get very very little here i mean i staged it but Joe who is like my head maintenance guy contractor employee he's amazing he kind of led up the effort on this one and like I said earlier this project was largely like we've been working on this for eight months now and the reason why is because this was our whenever we have time we'll work on this property I actually bought this house for fifteen thousand dollars that's right fifteen thousand dollars at the courthouse let me at the courthouse steps so it was going through foreclosure the person lost it the opening bid was 15,000 I bid like fifteen thousand and like one dollar and I got it i had to pay cash for it and then we rehabbed it while we were working on other projects so like hey we got a week off we'll go put a week into this point we had three guys on our crew this year working on projects and this is kind of good um Brendan after many nights a month are you or renting are you so I've never read that this is brand-new this is actually going on Airbnb and home away this week so I have no idea but I'm hoping I'm hoping to get at least 15 to 20 nights a month blanket I get 15 a month and let's say a hundred bucks to start with for night that's 1,500 bucks that's about where i would decide whether or not i want to keep this is a vacation rent or not because as education let's talk numbers real quick so as a vacation rental oh I can keep getting a tour while I thought as a vacation rental I have to pay the electricity the cable the Internet's all that stuff that you know in atwater the sewer the garbage is a garage we stop claiming this out that should be cleaned out today but the garage should be all cleaned out we might have been paint those wall so they're all just white maybe like we did over here so we have a little laundry anyway so because i have to pay all those expenses with this property I'm 1500 of about my work helped break even but about my the point where I say that it uh you know it's worth doing a vacation rent or not if I can get 1600 great if i only got 1200 a month well i might add us to go rent it out of the rental for eight hundred dollars to a tenant and they could pay all their own stuff so it's rainy because this is Washington and that's what it always looks like I Julia asked how much did the rehab costs we're at about thirty thousand dollars on rehab so I'm about 45 into the whole thing I might be 50 by the time we're done with staging I need to add up all those numbers still but we'll have about Yeah right around 50,000 probably when I'm all done it's probably worth like 75-80 it's probably worth that said this is way nicer than any property in this area for a two-bedroom house we're just cat because of appraisals like this house is going to appraise as what other two bedroom houses are so I don't wouldn't plan on flipping it I'm Draya said Andrea one of the two said nice congrats I wouldn't put you that name Oh Malika said where's us in Washington so if you were to go if you already go straight from Seattle down to tacoma and go another 45 minutes south you get to Olympia or half our selves into Gomez Olympia and then if you were to go from Olympia to straight west towards the ocean so I'm near the ocean if you guys have seen the twilight movies if you know you know twilight like you know edward and bella and all that they live here like this is their house no but they live in this light area is what takes place I'm kind the Olympic Peninsula and so that is there's a little bit of tourism here because of that is that people especially in the summer they travel the Olympic Peninsula if you guys have never done that it's amazing you should do it but anyway that's what we're doing so um got a property manager did the turnover so one of two things i have a friend actually actually my well he's a friend Joe the guy who model does house his wife actually does that for a job she's a house cleaner who takes care of vacation rentals out at the beach which is 30 minutes from here and she offered to take care of it just for the cleaning fee which would be great like tenant I mean the Airbnb tenants or whatever will be paying the cleaning fee and she'll get us get it and take care of it that said I'm not going to ever do it yet not that I don't think she'd do a good job she would knock it out the park but I have a full-time assistant / office manager and Tracy and she's amazing and she also was a house cleaner for a while so I wanna first were to do it together like I'm gonna manage the booking part trace is going to do all the cleaning stuff and turnover and then once we get a system down that I feel good about I understand it then will hand it over you know it's kind of my philosophy with real estate investing right I'm a big believer in managing your own properties if you can first because then you know how it's done you know what generally things cost how it generally works and then I can hand it over and I can feel comfortable knowing that it's being done right so I'm a big believer in that um malika's are jammed in Seattle trying to figure out where Washington you can find something for 15 grand I mean like this is obviously a crazy-good deal right 15 grand was cheap however it wasn't on the market it wasn't listed it needed a lot of work I bought it sight unseen in fact I bought it with like I all I could say I mean I saw the outside but I'd never saw the inside because it was a foreclosure and so I bought it sight unseen and and it needed more work I originally was hoping for 20 grand we went fifty percent over our budget so um anyway so yeah that's kind of cool Zack said three percent roughly if it works of the short term represents long-term not too shabby plus cashout refi potential that's an outstanding deal great job thank you very much neck yeah i mean i love deal like this so let's talk let's stop birth strategy this is one of my favorite strategies in the world it's called the birth strategy and it's where you buy a property Yuri have it you rent it out you refinance it then you repeat it so let me give you the number i bought this for 15 i put 30 into it let's say 35 including everything's about 50,000 i go to the bank and I say hey I got a property worth 75 80 grand I need 50 grand the bank's is ok we'll give you a loan for 50 grand 45 whatever I get all of my money back out right now I have only my cash in this deal I almost house free and clear I get all my cash back out now I've got a mortgage of 400 bucks a month or whatever and then I can take my money and go do it again on another property that's the birth strategy and I used it more than anything else to build my rental portfolio and the beautiful part about the birth strategy is it means every property i get i get equity in it roughly twenty to thirty percent in every property so if i can have let's say twenty thirty forty thousand dollars in equity on every single property that i buy how long does it take to get to million-dollar equity to million-dollar 10 million dollars that's why i love the birth strategy now that i'm 10 million air but is that a word 10 million a but the point is the same right like you can build up equity fairly quickly by doing the birth strategy you one two three of those a year and in a short time you can build up a massaman equity especially if you're doing this in an area like Seattle you buy a house for three hundred grand you put a hundred grand into it now you got 400 into it but now it's not worth 400 because you were smart when you bought it it's not worth 600 right so basically you flipped it but instead of taking your equity and paint all the realtor fees and closing costs and the massive taxes you keep the equity in the property you get your money back out and you go do it again and again and again and so if you're an expensive area Burke can be a fantastic way to invest in real estate you're in a cheap area like I am you can give me a fast pass away other questions you guys have could just said knock knock cool Courtney said Airbnb calculator if it's successful it's on the agenda uh Kyle said hi flat Brandon killer thanks let's see mmm Malika said thanks for getting Seattle eyes hope yeah Julius and how big is your portfolio so I have 52 units right now I had a little edit 54 and then I sold a couple and i'm hoping to sell a couple more actually i'm hoping to sell one next week fingers crossed that was kind of actually a fun deal i bought it okay so we got you guys a quick story so i bought this property december let go back on December twentieth I was looking at my my goals for the year and I realized I had set a goal for buying 12 you last year and i SAT there and I added them all up and I went I only got 11 and I was really ticked off because this is the twentieth of December it's right before Christmas nobody's open anyway nobody's working and i was like i have 10 days to hit my goal and I just not really thought you deeply but I never really added it up towards the end of the year so anyway I was like shoot I got 10 days I can't do that and then I saw I thought what if I did what if I was like I'm gonna do it I'm gonna go find a deal and I'm gonna close out in the next 10 days what if I set that as a goal for myself to do and you know I'm a big believer in whatever you set your mind towards you can you can achieve that if you work it so within 24 hours I was sitting at a kitchen table with the ladies signing the contract on her house to buy it I bought her a house for fifty fifty thousand dollars even I paid out a thousand and closing costs and a thousand dollars Commission to my assistant I pay her a thousand bucks every time we buy a deal and so I'm ending 452 no I could flip it it's probably worth about 100 when i'm done with it but it needs a fair want to work and I didn't really want to do a rehab so you know what i did i put it on the market just to see if I could sell it and I got an offer within like three hours I got an offer for 64 9i think it was um and so I might after realty fees on my realtor fees i might make six grand on it 67 grand and then i'll pay taxes on it so actually like clear like five right but that's I'm fine with that I might make 15 if I flipped it or five not doing anything I'll take the five neither anything because I don't want to do the rehab either way got me to my goal of 12 I'm going for it so all right let's see you Jesse said got to give credit to you guys in robert kiyosaki give me the real estate I gotta give credit to Robert E Gabe he got me into real estate at least I read this book and bigger pockets so like I read rich dad poor dad and then I went and found bigger pockets and so like I got the mentality part and I got excited about it from rich dad poor dad and then I turned that to bigger pockets and learned a lot about real estate from BP which is awesome uh let's see Brendan said have you ever had our appraisal coming low on a bird after the rehab and investor one all the equity back out but you're short what do you do good question so the key to a burr investment if your time bur investing the key of course is getting your valuation high enough after it's all done to make sure you get your money back out or most of the money back out it has not happened to me yet where I don't I didn't get the appraisal high enough however it's very possible in fact i'm doing a burr right now on a four-plex that most likely i will run into that problem because there's no other fourplexes for sale anywhere in my area that are nice and i have a really nice one I really fixed up nice so what do I do well a couple options one i mean i can probably get a 70-percent loan-to-value loan doing a refinance which means i won't get all my money out but I'll at least get the investors money out I never want to go I don't want to borrow too much from a private lender until you know unless I'm a hundred percent confident on the ARV which we never can be right so anyway so this option I will probably end up leaving a good like 30 grand of my own money in this deal the fourplex that I thought not this not this house but the four plex um I another option I could bring in a partner but hey you want fifty percent of this deal i'm working on partner with me and you bring the difference in the birthing so you could do that option but really the reason it hasn't happened to me is because I'm very conservative on my after repair value when I buy a property I know about what it's gonna be worth when it's done not just because I'm you know figured it out but I talk to other people I talked to my agent I get examples from them I look at the data I look at the comps and I try to get very very comfortable in that so hope that helps there um Michelle Patel said are you still mainly buying REO properties and do you generally need all cash new stone no this is actually the only deal have ever bought that was from the courthouse steps that I needed all cash for almost everything else i buy is either a foreclosure like after the foreclosure process in which case no you don't need all the cash you can get a loan on that or it has been from like a landlord who was burned out tired once like my four-plex that was from the landlord i sent a piece of direct mail marketing to so that was that uncool let's see one of the questions we got here let's see John said is that fourplex bur the one for your daughter's college yes but those who don't know that story i bought a four-plex and I've been to put it on a 15 year mortgage whenever the refinance goes through and it should cash flow almost a thousand dollars a month which is awesome it's all rented out now it's all rehab now we're just waiting for the seasoning requirement to kick through that one year sees any requirement and anyway so we're going to do that and then were to put on a 15 year mortgage it'll pay off over the next 15 years so tens will pay off the mortgage and in the 15 years when my daughter is 16 she'll be getting ready for college because she's super smart right so she's going to be going a little early and that property will pay for her entire college education Oh should be worth conservatively $250,000 but i would expect probably even higher than that especially if inflation goes up you might be worth 3 350 who knows and that will be paid off frankly I can refinance it and cover her college education and basically my tenants will be paying for her college education I love it all right Oh Jeremiah said wish I could listen sitting at work and I don't think my boss would approve of me trying to become financially free look if you're at a job where your boss doesn't want you to become financially free you should find a new boss hey but yeah we won't put these later as a Zach said they're the bigger pockets message Zach were joining VP social said you can check this video out later as well Johnson what's a season requirement good question so when you buy a property typically a bank will want to wait have you wait at least six months if not twelve they like 12 some banks Wow six before you can refinance it so if you're doing a burr strategy of you're doing the burr strategy where you buy it and you rehab it and then you rent it out before you can refi you got away at least six months though I'm waiting 12 on this one because this particular bank wants 12 I know I do a lot of stuff through timberland bank there's a local Washington's the lender that I've used uh Tom said have you built any duplexes or fourplexes I have not built anything ever other than I took a shed basically one time it was like an old barber shop it was gutted completely and I built a studio house out of it and it's one of my favorite properties i love it but it basically I mean it was everything electrical plumbing I mean everything except for the exterior walls like the siding and the roof everything else me to be done John said nice good to hear it's all rented in his cash flowing good a thousand dollars a month on four units is tremendous yeah this was a tremendous deal and here's why it was a four-plex but the beauty of this four-plex is that the tenants all the water meters are separately meter which means tenants pay their own water their own sewer their own garbage their own electricity so I'm responsible for taxes insurance there's a little bit of flood insurance on on three of the three of the units long story there which hopefully will be wiped out in the next year because they redrew the flood lines anyway and now I to pay the mortgage and that's about it and of course vacancy repairs capital expenditures but ever since we we put a hundred grand into this property and so we don't have a lot of repairs so that's kind of nice um Melissa said I have a 12-unit a/c neighborhood should i do carpet in the bedrooms or laminate throughout you know I still do a lot of carpet even though I hate it I'm trying to transition to laminate in fact actually what I like more is this stuff so this is called allure vinyl plank flooring it's from a company called the lure I think or some traffic master maybe as the company but Alura is a product and it's basically it's like laminate except for its rubber and so its water they don't call it waterproof or water resistant but its water like proof ish so like you can have kids drop stuff on this or whatever and it's super resilient it holds up to a lot of cool stuff I put this in properties for years now it's a little more spending about a buck 80 a square foot from home depot but it lasts so long and it's really fast and easy to put down you don't need a specialist I you just cut it with a knife anybody can learn to put it in so we put this in this entire property if you notice this the entire thing is all there's one floor even the bathroom going down the hallways because look when this property goes vacant you know you know if I keep it as a vacation rental which I probably will every time they go on I just mopped the floors real quick so anyway I like I said a lot hey Laurie turn to join my mom what's up mom Karen said have you ever done by and hold using hard money uh sort of I've used hard money to buy properties and then rehab them rent them out refinance them and then repeat so in other words I use the birth strategy i've used hard money i don't like to I like to use private money because it hard but he is just so expensive private money I find is a lil bit cheaper Glenn's that are you related to the ZZ top guys yes they are my brothers from very different mothers so no I'm not do you have any video or the fourplex you bought yeah look on the Facebook page bigger pockets Facebook page go to videos I think you'll find one there or I don't remember how to get there anyway i wrote a blog post and i put a video on there once maybe go to google and type in bigger pockets and then type in how I bought a four-plex for a dollar down how I bought a four-plex for one dollar down and I go into really in-depth detail and I think I put a video on there but I can't remember for sure art said are you really taller than Josh um you guys if you want to see me and Josh together go to our Facebook page you're on it right now probably right on bigger hugs facebook page watch the video that we put out about I don't know four hours ago it's me and Josh together and we walk up to each other actually we walk up to each other and he's like up to here on me like it's kind of humorous make sure you guys watch that but yes i'm a little taller than judge I'm six foot five so i think josh is probably what six foot maybe 5 11 somewhere in there um Chris side you pull permits of rehabs are just the big gut jobs we do them on anything that requires a permit so I I'm good friends with the inspector my area heat and I'm pretty familiar with what needs it so plumbing electrical we get permits and stuff like that Florine we do not if we don't need it in my area some areas do require flooring permits I mean some areas are of our painting permits we do not in our area we don't require permits on a lot of stuff I mean plumbing electrical foundation stuff moving walls all that but just like tiling a bathroom like this house there was really nothing that we got a permit on I think we pulled a permanent electrical for one thing if i remember right but most things don't require that all right vishal said can you start off doin a bird strategy with a 203k loan yes if you plan on living in the property the 203k loan is a it's like they should just rename it the burl own because that's what it is it but you have to live in the property so here's an amazing strategy for you guys who are just getting started I love the strategy you buy a property that you're in a live in with a 203k loan which means a 203k loan gives you the rehab money and the purchase price all lumped in together and you get paid three and a half percent down so it's fantastic but so you you buy a four unit three unit or two unit but I like four units by a four-unit property that needs work you live in one unit you use a 203k loan fix it all up and then now you've got this you even have to refinance you've got a 30-year fixed mortgage low interest rate low down payment on a killer good fourplex that you can move out of after a year and keep it for the rest of your life what a great way to get started now not every four plex works you have to do your math and but if you know that your math you're going to be fine if you don't know how to do real estate math I don't invite you guys come to my next webinar I do with a live webinar every single week on bigger pockets go to bigger pockets calm / webinar and come to a live webinar and we walk through live deals every week we analyze them we determine what number makes sense and then we we look at a bunch of stuff about the deal so if you're confused about that part come to any webinar we have a lot of fun every single Wednesday generally all right Lee and Teresa said you never say hi to me hi Lee and Teresa you guys Rock um Laura said how do I keep from having to put thirty percent down uh read well all far as Eddie's house hacking can be a good way using an FHA loan or something like that another good way would be use a partner have them bring the thirty percent down another way if you have equity in another property you can substitute your equity another way is the birth strategy using private money or money another way is private money another way is hard money in other ways lease options another way seller financing another way is wholesaling to get cash to put down in a property there's lots of ways if you want to know more about that I wrote a book called the book on investing in real estate with no and low money down you can pick it up an amazon for like twenty bucks or get it at bigger pockets icons / no money and you get a bunch of bonuses with it or you can pirate it off of like some pirate site and then you don't to give me anything for it but whatever all right mmm all right guys I'm gonna do like a couple more questions and then I'm gonna get out of here because my wife and i are going grocery shopping yay let me actually see if she's here and for those just joining her walk through the house again just gonna see what I'm doing I'm sure what looks like outside it's good a crummy day oh she is here there's my wife she's waving that's my truck this is the neighborhood ranks to a park over there um if we got a couple nights houses next door like this house actually identical next door is kind of funny they built these choices together a little park over there it's a very like just blue-collar neighborhood and I don't know again I want to go see if I little girls in the car oh let me see I don't mind my don't mind my messy truck hold on hi hi goober what's going on are you sleepy this is Rosie this is why I invest in real estate oh look at her she fell asleep while it was recorded or yeah there's my wife hi Heather anyway so we're gonna go do some grocery shopping so let me do one more question me show this oh my gosh you got 10 how awesome my wife is this is how awesome my wife is she loves me um well let's see so questions do you like vacation rentals better than regular I mean this is really my first vacation with you guys this is a first rental property ever did as a vacation rental and I'm test tested now I have a feeling I'm gonna like it a lot that you guys have been leave of it she's a investor i needa blogger on bigger pockets and anyway he got his first vacation rental recently and he loves it he gets a ton like he is he gotta like booked out like a ton he's on the arizona if you guys want to chandler go stay with Ben but yeah he's on Airbnb in Hawaii I'm gonna do both air BB and homeboy as well alright guys I'm gonna get out of here because I got kind of a drink I got grocery shopping to do and a baby to go look at so thank you guys so much for hanging out today I hope you enjoyed this video have you got some value of it if you have not yet give me a thumbs up or a heart please do so in fact even if you already did give me more because the more hearts and more thumbs up we get here the more people like it another thing I'll say is come to the webinar this week bigger pockets calm / webinar and if you are not yet following bigger pockets here on facebook please do so we do live videos at least once a week sometimes twice a week and I want to make sure you guys are there so make sure you do that there's also a way to like like make sure that you guys see our stuff first and maybe zach will actually write that here in the chat area where to go cuz i can't remember we have a link to a video on how to do that I think anyway just make sure that you see our content facebook likes to hide content because they want they want people to pay for it and so anyway thank you guys very much melissa said thanks Curtis that thanks Brandon thank you guys what's up Cole thank you almost as to how many units you have now 52 and that's it thank you guys so much i will see you later have a good day
Brandon Turner, co-host of the BiggerPockets Podcast, shares his latest vacation rental property with this live (2.27.17) tour.
Learn the details of how he purchased it, fixed it up, and ultimately plans to rent it on Airbnb. He also answer’s questions from users who joined the live event!