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What does BRR mean? | Understanding BUY REFURBISH REFINANCE | Property investment UK
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- čas přidán 17. 01. 2021
- BRR or even BRR-R means Buy, Refurbish, Refinance and Rent is one of the most popular strategies within property investment in the UK. It is an extremely effective way to start a property investment journey and be able to have none of your own money in the deal. In this video I wanted to explain the strategy of BRR when starting as a beginner in property investing and how you can use this within your own property strategy.
Learn about ROCE Here: • What properties should...
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I do this every month to help me develop my property portfolio! Buy, Refurbish and Refinance is part of my property investing strategy and it should be part of yours!!
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One of the most informative and real property channels.
Love the work!
I appreciate that! We've got loads of great content coming up!
Thank you for your valuable time and effort in making this video
It's my pleasure
Loved this video!! Really great for someone like myself wanting to start out in the property investing world! Well done :)
You can do it!
Definitely got massive value from this, thanks again Jamie 👏🏾!!
Great to hear Paul!
Great video Jamie - I loved the example from Manchester and completely agree that BRR is not a strategy but rather a tactic to apply to a strategy. Keep up the great work!
Thanks James, really glad you enjoyed the content!
Quite informative - especially that 6 month rule which I completely believed in. Thank you.
You're very welcome!
Great video trying to get my head around it all 🤔
Keep up the good work
Thanks
Billy
cracking upload mate. Thanks Jamie
Glad you enjoyed it
Another great contents.
Thanks again!
Hi Jamie. I found you tonight and have been thinking about doing this as part of an income strategy from my channel and website
Love it
Useful vid but couple of questions. When I've done this in the past we always struggle with the end valuation and getting the cash back out. It doesn't seem to matter how much evidence you give the valuer. With us they always just ask how much we bought it for and how much the refurb was and then they base the new value on that figure which obviously leaves out a lot of costs like stamp duty etc.
Last one i did I bought for 350k spent 70k on refurb. exact same house 2 doors down had recently sold for 500k so expected a similar valuation. They valued at 420k saying 'well that's what you spent on the refurb'
Excellent advice 👍
Glad you think so!
Man never quit doing these videos!
Neverrrrrrrrr! 💪
Thanks Jamie, I enjoy your enthusiasm and clear delivery. Looking at first BRR after hopefully completing my first BTL shortly. My question is should I try and release some equity from my current house for a BRR (around £80K) or just release enough for a deposit and then bridge it?
That's exactly what I am doing now, even the numbers in your example are quite similar to mine. I hope I could get a final value of 120k when I refinance it lol.
You got this!
Thanks for all the help Jamie! I'm looking at getting 2 properties fairly soon. Would I be better off opening a limited company?
Yes, absolutely
Hi Jamie, thank you for the amazing content, i have bough a property on a buy to let mortgage fixed for 5 years, the property needs a significant amount of work but once completed should increase both rent and sell value, my plan is to rent it for at least the next 5 years but i would like to release some capital once the refurbishment is done, how can i do that when the mortgage is fixed for 5 years ?
Great video. Problem for me is that houses around my area cost at least £250k 😭😭😭
Hi Jamie, thank you so much for the video it helped a lot, just one question. I've gone through the stage of BRR for my first time buyer property but never refinanced the property back earlier this year when I purchased. Due to age I have a family member acting as a guarantor and we would want to re-mortgage in 2 years when the fixed interest finishes and to take them off the mortgage all together. Property was bought BMV and value has been added through refurb + with a tenant in now. Do you think this has stunted how much I could have maximised the start of my portfolio?
Another good informative video.
Thanks 😊
Glad you liked it!
Thanks for another great video Jamie!
What's your thoughts on being blacklisted for refinancing within those 2 years of mortgage initial period? Is that a real thing?
Never had any issues like that at all. If communication is clear, most lenders understand what you're doing and they still make money from you!
honestly, NEVER heard of that happening to anyone before!
Hey Jamie, great video! I'm just struggling with one thing. So when you get a mortgage, you are agreeing to pay a set amount of interest, so when you refinance, does that amount not need to cover the old amount borrowed + the interest of the old loan in order to pay the old one off?
Cheers
talking about Money and NUMBERS: 5:11 - it's £190k not £180 | 95x2-190, you're welcome lol
Haha, cheers mate. I’m a screw up 😂
Lukas for the future open your mind, you could see all the good things that Jamie said, unfortunately you saw the only thing wrong that he did in this video
Hi Jamie, are you able to refinance a property if payed off fully in cash? Love the content keep it up ! Thanks
Yes you can! I often will buy a property in cash to get a quick completion the refinance once I have control of the property! Hope this helps
@@JamieYork Thats brilliant thank you for the quick response 🙏🏻
Jamie your videos have been a great help. Keep up the good work. Quick question: I am looking to purchase a buy to let using the BRR method. Would you recommend this for someone who’s investing in their first buy to let? I would need to get a mortgage out for this and also ofc be aware of early redemption charges. My goal is to purchase the first property, pull my money out and repeat until i have at least 2 properties. Please let me know your thoughts!
Oh and also, I don’t NEED to refurbish the property do I? For this tactic to work? I mean I’m looking for properties that are already at a decent standard. Would the BRR method still work? Sorry for the multiple questions, would appreciate any advice!
Sounds like a great way to get started. This is the way I started. Be careful to not over leverage the property!
That would be a different strategy than BRR
@@JamieYork Thanks for the reply man. Can you give me an idea of how I could over leverage? Thanks again!
@@Runed101 BRR is strategy to apply for a BTL. So if you don't do BRRR and buy TurnKey properties to let straight away you are doing vanilla BTL. Therefore how come you will pull your money out to go and repeat?
Unless if SOMEHOW you buy a property that is 20-30% discount and then refinance and get that equity out, I don't see how you could pull money out, neither how you will find such discounted properties that don't need work..
Keep improving your knowledge before you dive in
All these videos on buy refurbish rent out and refinance all sounds great but what are you telling the banks about how your going to repay the mortgage?
I don't tell them anything... I never intend to pay it back... and they don't expect it either. People carry on refinancing, benefitting from the cashflow and capital up lift
@@JamieYork good to know. I’ve inherited a rental property and plan to refinance it to raise funds to start a portfolio. Fed up of making other people money and time to do it for myself now.
Hi hope you’re well
Please can you help, I’m struggling to get my head around refinancing and how much money you can pull out of a deal.
Purchase price: 100,000
Deposit: 25,000
Fees+ Refurb: 20,000
Total spend: 45,000
New Value: 135,000
75% LTV: 101,250
How much money do you then have left in this deal, if any and how’d you calculate that?
Thank you!
Hi Jamie.
Like your vids by the way. My question to you is, i have invested all savings in a property which we bought to live in, started of as a dated house but being in a trade we have refurbished property and added loft convertion to it so our lvt is around 50-65% of the mortgage left on property at the moment, but there is slight problem because we have done all this work, we haven't got any saving left instead we got a debt which we are paying of at the moment, so idea i had was remortgage property and bring equate out from the house to raise deposit? Would that work if we would like to start invest in buy to let and what would be your advice on this.
Thanks in advance
Hey! Thanks for the comment! That's exactly what you could do, technically you could refinance up to 90% of the market value if it's a residential. Obviously you need to make sure that you reach the criteria of an affordability check, which you'll need to speak to a broker about of course :)
Thanks Jamie for the informative video.
This is the strategy that I'm looking to source and package up for investors.
Now that you mentioned 150k is the sweet spot it got me concerned a bit.
Do you think is it a strategy worth to source in an area where I live where house prices are between 200-260k with average monthly rent of 800-1200? What's your view as an investor on these figures?
Thank you very much
Forgot to mention that the capital growth in my area over the last 5 years was at 30%
Glad you got value Gabor! Yes, that will still work mate, it's just how you position the deal! If it's at a great price and with that capital growth!!! Amazing deals to be had for sure.... you just need to make sure it's got the right rental coverage!
@@JamieYork thank you very much for your quick response. It's given me piece of mind tho. After stress tesing some potential deals properties still would bring 300-500 positive cashflow and great, approximately 10k pa capital growth. In my opinion it's a very attractive town to invest long-term.
Hi Jamie, I have a question, is this a strategy you will employ on EVERY property purchase you make? What if the property needs no refurbishment? Or do you only source properties that are in need of refurbishment so you can make a profit via BRR?
Not on every property. BRR is just a tool for property investors when a property type comes available. I do target BRR Properties but I also buy properties and sell them without doing any refurbishment
you didnt do the roce formula. your videosm help me with the numbers which is,mgreat. can you do a video about presenting deals to investors and the numbers and information that should be included. if you have done anin depth video of this can you put in the comment section please.
Sure thing 💪
Regarding BRR approach, when you refurbished the property would the bank revalue your property from 80K to 120K? Would they engage a valuation company to value the property or do you need to show ready tenants for your refurbished property to justify the 120K?
Hi Jamie. I know is best to use Bridging Loan for BRRR deals but would it be ok to use normal BTL Mortgage and then refinance(or the banks/lenders will hate you?)?
I'm asking as I feel Bridging is riskier cuz if something goes wrong and you don't get the mortgage after the refurb you are in big trouble after few months(right?).
Absolutely fine, just make sure that there's no early redemption on the mortgage
Do you offer training / mentoring Jamie ?
I do! Check out my latest masterclass this Thursday here: bit.ly/EPTAYT
Hi Jamie , how to put 20% down if you have 0$ savings . 1 .Can we borrow money from lender 1 for the down payment ? Can we borrow money for the Morgage from lender 2 ? Reno’s from credit card. Is this approach works ?
When you refinance the house and pay the bridging company back, what happens to the deposit on the house? The original house owner doesn’t have a deposit anymore as the bridging company has there money back, and I lent the money off them to pay the despot to refurbish the house? So how can you possibly own the house to rent out if there is 0 deposit on the house??
But doesnt this super increase the overall debt. What would be exit strategy? Especially if the value has been increasing / decreasing during the duration and ends up the same price what you initially purchased it for? Would you not have more to pay back overall? Thanks
Then you need to make sure your purchasing at the right price
This strategy has an inherent risk you have rightly identified. It depends on prices rising to reach the new amount you refinanced at. If they drop or stay same, you might be in for some trouble down the road.
Hi jamie - does this means while refinancing you will also leave 25% deposit in the deal ? ie the 30k ?
Yes :)
I assume if you are buying a property on a BTL mortgage, would the property have to currently be a rental, so the banks know your rental coverage? Or could you get a BTL on any house, and prove the proposed rental of the house for mortgage purposes?
Not at all, you can predict the rentals very accurately based on data around you, which the banks rely on also :) Yes, pretty much any house as long as the rental coverage is there :)
@@JamieYork when applying for a further advance on your btl do they use the rental income to see if u can afford also
how long should a further advance take
would the bank give that 90k/75% BTL loan given that the rental income/coverage wont change...?
You can still refinance on a normal buy to let after 6months if you add value right?
Yeah you can!
@@JamieYork thanks loving your content ❤️
Can somebody help me understand something.
£100,000 property price
£80,000 mortgage
£20,000 deposit
£15,000 for refurbishments
refinanced the property for the value of £140,000
What is the equity, profit and is your new mortgage monthly payments you refinanced to, now have higher payments for the £140,000??
Im just not understanding what happens to your existing mortgage payments? are they paid off from refinancing?
Can you use this for a residential home?
As in one you're living in?
@@JamieYork one I am going to buy to live in -then look to add value and refinance pull out the money (as much as I can) then buy another residential house for my sister .what do you think?
AGP
Thanks! Go to www.aspirepropertygroup.co.uk and fill in your details :)
can you please explain how the evaluation takes place, don t they see how much you ve spent with the refurb , why are they gonna evaluate the cost with the refurb X4 ?
They will look at many comparable metrics such as similar houses in the area with a similar spec, what you've done and other metrics
Not sure of the figures - 95k+95k= 190K right?....
I probs did a mistake! Sorrrrrrrrry :(
No worries - won’t stop me from watching your informative videos 👍🏾👍🏾👍🏾
Can i take out a mortgage in order to buy BRR and also refinance the property that’s already on mortgage after refurbishment is done ?
Yes - although you have to be careful with early redemption penalties when remortgaging the property.
Yes sir! But, as James has said, be careful with early redemption charges!
Spot on!
95K +95K = 180K 🤔 I think you’ll find it’s 190K
Oh damn it. What’s the minute where I get it wrong. Need to get better at quick mental math eh! 😉
Good video though I’m doing a BRRR at the moment I have to rent it out for 6 months though before I can refinance it
@@paulh2184 The BRRR you're doing, did you purchase the property in cash or did you get a mortgage?
@@paulh2184 try kenton finance they refinance a lot quicker than 6 months
I bought the house cash by refinancing 2 other properties so I own it outright
Doing my research, getting the impression you may be a bit of a conman blagger type. Not another samuel leeds are you?
Thanks for the comment Jee Wiz! Great that you’re getting your research done! I don’t really know Sam Leeds tbh mate so couldn’t comment on him, but no, I wouldn’t say I’m a conman blagger. I’d say I’m pretty straight talking, I’ll share my opinions on thing like the market and the facts as I know them. I do property full time with offices up in Leeds, which people are welcome to come to (out of lockdown of course) and you’re welcome to watch the videos. I’m sure you’ll make your own mind up of course but genuinely hope you get some value from watching. All the best
@@JamieYork thanks, i just know leeds has scammed a lot of people by selling courses, but if thats something you dont do then fair enough
Selling courses isn’t scamming people. It depends on what you’re promising AND the value of course... which I can’t comment on Sam around.
For me, yes I do offer paid for education as well, and add an incredible amount of value I feel.
That being said, if people aren’t ready for that then there’s no pressure at all and I hope my CZcams videos are enough to get them started and giving enough value!
wanting to invest in brrr. first time buyer and international investor. can you share a contact to discuss some opportunities?
Useful vid but couple of questions. When I've done this in the past we always struggle with the end valuation and getting the cash back out. It doesn't seem to matter how much evidence you give the valuer. With us they always just ask how much we bought it for and how much the refurb was and then they base the new value on that figure which obviously leaves out a lot of costs like stamp duty etc.
Last one i did I bought for 350k spent 70k on refurb. exact same house 2 doors down had recently sold for 500k so expected a similar valuation. They valued at 420k saying 'well that's what you spent on the refurb'