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What you’ll learn in just 17 minutes from today’s episode:
- Learn what character homes are, and how to go about the BRRRR strategy with these types of properties
- Find out what the approximate revenue you can earn, from renting out renovated units in character homes
- Learn about the essential points to consider when going for the BRRRR strategy with character homes
Elizabeth Milder & Cole Skelly are experts in the application of the BRRRR method (Buy-Renovate-Rent-Refinance-Repeat) of real estate investing in the Victoria market. By identifying properties with the potential for adding square footage, Cole and Elizabeth add massive value to the properties they purchase, converting single-family homes to multi-unit rentals (2, 3, and 4 units). After many properties and lessons learned, and 2 spec houses under their belts, Expansion Properties was formed.
In this episode, Elizabeth and Cole talk about the strategy they specialize in, the BRRRR, where they especially get character homes to renovate and turn into rental units for them to generate cash flows and revenues.
01:40 – What is a BRRRR strategy
03:18 – What are character homes? How do they differ from historical homes?
05:08 – Getting a look at how the BRRRR strategy works with character homes
09:19 – Advantages of construction financing
10:33 – How much cash flow do they generate from renting out the units
11:46 – Approximate gross revenue per month for these kinds of properties and how much is a bank’s appraisal for them
14:06 – Number of years they been doing BRRRR strategy
15:18 – How do they get the work done with renovating the buildings and homes they acquire
17:09 – Recommendation and advice to anyone interested in the same strategy they are into
“Basically, what we’ve been able to do you using BRRRR is, we find these older homes that have tremendous opportunity to add value by way of adding square footage, typically, we’ll dig out the basement. With that lift that gives us the ability to refinance once we’ve gotten to the end of the project and rented it and allows us to pull the money out the capital investment that we’ve put into at the outset and then use that towards another property.” – Elizabeth Milder
“The city of Victoria has a house conversion regulation where you can actually take these older 1900 houses and convert them into legal rental units without doing the rezoning process. So, it’s a character home, but we’re allowed to touch any part of the home. It’s not a heritage home.” – Cole Skelly
“This is one thing that I’ll mention because people often are scared away from deals because the price point is too high. What we’ve learned through a few scenarios now is, don’t be afraid to lowball if you have to, because you never know, it’s always a no unless you ask.” – Elizabeth Milder
“Whenever we’re analyzing a property at the outset, we’re always looking for four to $500 a month cash flow on each door. We found that that’s a really comfortable number to absorb potential vacancies.” – Elizabeth Milder
“One thing that we definitely recommend to any new investor is being very realistic about what it is that you can manage, and having a good understanding of what your finances are because this is something that a lot of people aren’t really in tune with.” – Elizabeth Milder
“I find that we find that a lot of people in talking about investing in property, they often have this kind of pie in the sky idea of what it is they want to do, but they’ve never actually thought about what it takes to see that come to fruition.” – Elizabeth Milder
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