How To Buy 10 Rental Properties In 5 Years Using The BRRRR Strategy

Here's how you can buy 10 rental property within five years by using the BIRR strategy. So the first thing I want to talk about is this. We always got to start with the end in mind and then work backward to the present. And then we have a game plan that we can actually move forward. So with the end in mind, here's what the question I want to ask you. Three questions. Okay. First question is this. At what age do you want to have the option to work or not work? When my mentor started mentoring me, I was like 26, 27. And he asked me that same question. That's at what age do you want to have the option to work or not work? And I said, well, if I got to about 45 years old, I have the option to work or not work. That's when I really feel that I can retire. Okay. He says, great. Then the second question that he asked me was this. How much passive income would you like to have every single month to live comfortably if you're debt free? Especially at 45 years old. And I said to myself, you know what? If I had like, you know, maybe $15,000 a month in passive income and I'm debt free by the time I'm 45, I think I can live real good. You know what I mean? Debt free, you know, 15,000 a month. And then if I want to work on top of that, I can. Man, that won't suck. So he was like, okay, great. 15,000. Then he asked me, what is the average rent? And at that time, I think rent was about 1500 bucks. And so I needed basically 10 rental property bought and paid off by the time I'm 45 years old. So I could actually get $15,000 a month. And so I was like, okay. So I got real clear. All right. I want to actually work or not work at 45. I want to have $15,000 a month in passive income by that time. And I was at $1,500 per unit. I need 10 of those. And then my why was by the time I'm 45, I want to spend the second half of my life actually enjoying myself, traveling with my family, my kids. I didn't have kids back then, but I want to, I was thinking about all that and I want to make sure that I set myself up early. So by the time I'm 45, I have the freedom to work and I work, have money coming in. If I want to work, I can make more money on top of that. And I can spend time with my family, do the thing I really want to do, but I didn't have to work. So that was my why. That was my game plan. So then basically at 25, 26 in that zone, I was focused on start accumulating 10 property. So let's talk about phase one, which is accumulation. The first thing we're going to do, we're going to accumulate. We're not going to worry about paying them off or anything. We want to accumulate the 10 door first. Okay. So in order to accumulate 10 door, there's two things we got to look at. One is the money to buy the property. And two, you got to have basically good credit and good income, low debt. So you can qualify to actually buy the property and keep it as rental property. So let's talk about credit first. If you're going to actually buy something whole, if you want the best rate, you got to get at least 720 and higher on your credit score. You got to have good income. Okay. And then of course you want to keep your debt down low. Now, the second is talking about income. If you make good money already, you can buy one and then buy another, another one. But some of you guys are a little bit tight on money, right? If you got one job and you're making good money, great. But if you need to make more money, you got to start thinking outside the box. Where can I actually make more money? Where can I actually create more money so I can have more money coming to the front door so I can actually buy more property? I want you to start thinking about that. You got one income from your regular job and then start figuring out how to increase your income by adding one or two or three other sources of income so you can actually make more money. Because the more money you can make, the faster you can buy your 10th property. All right. So let's talk about accumulating. Let's say you don't own a house at all right now. If you don't own a house, you can buy your first house as a first time home buyer with something as low as three and a half to 5% down. If you did that, you bought your first property, then you live in it. And then if you want, maybe rent out a couple of room or rent out the basement right to offset your mortgage so you can live there for little to nothing or, you know, free. Now you live there for a while. Let's say a year later, you decided, you know what, you got enough money. You want to buy another one, turn that into a rental and then go buy the next house. And then you do that again. So let's say after your second or third time you did that, you know, 5% down 5% and you don't want to move no more. Now, since you're not moving no more, you got to start buying property where it's an investment property. Most banks that I want at least 20 to 25% down. Now you start to accumulate the next property, the next property, next property until you get to 10. When you get to 10 property, then I want you to stop. And we're going to start talking about how to pay them off next. All right. So now you already completed your accumulation phase. Now you're at that point where you got 10 doors and based on your 10 door, you have a certain amount of gross rent. Let's say you want to go for $25,000 a month in passive income. So each basically unit is worth $2,500 rent. And you got 10 doors. You got $25,000 gross rent. Now until these things are all paid off, that's when you're going to get all $25,000 a month in passive income for life. Now let's talk about phase two, what we call the payoff state. There's a lot of different opinion about paying off property out here. Cause everybody always talking about leverage, leverage, leverage, leverage. Don't pay off your property cause you can always leverage. But this is what I'm going to say. It all depends on this. It depends on how old you are. It depends on how much income you're bringing into the front door. And it'll also depend on what your experience you want to have in your life. All that matters. Okay. So let's just say, for example, let's start with age. Let's say you're 53 year old like me. Okay. And you know what? You don't want to keep working forever. You want to actually have enough passive income. So if you want to work, you can. But if you're 53 and you still are leveraging and buying more property and each one of these properties only making $500, you're never going to get the full effect. But yes, you might say that. Yeah, but I got a hundred properties. It's giving me $25 a month. Yes. Great. But you don't have peace of mind because you still got 50, 60, 70, 80, a hundred million worth of loan outstanding. And you're 50, 60, seven years old, still out there grinding, running on a treadmill, trying to pay the mortgage off. At some point you want a peace of mind. That's why people in this real estate game, peace of mind is underrated. They don't think about that. And what kind of experience do you want? Do you want to actually have a very freestyle experience when you're in the fifties and sixties? That's where the, that's the best part of your life. That's where you want to spend the time relaxing, going out, do things versus worrying about kind of keep grinding. So let me go ahead and start off by addressing the young adult for all the hungry lines out there that want to say that I want to buy more than 10 property. I don't want to stop. I'm making good money through the front door. There's two things you can do. Okay. One is, since you got your 10 now and you're still young and you want to make, you got good money coming in. Let's keep buying more. Let's buy 11. Let's buy 12, 13, 14. Let's say you buy 20 or more. Now you have 20 property or 25 property. Okay. Now you're up there and you only need 10 to really live a good life. So let's say you got 20, 25 property, you know, and you're in your, basically your, your forties now. So now you feel like, you know what? That's, I think I'm good. Now what we can do, we can sell probably half of those property, take all the equity out of those properties since they have all rise in appreciation, take half of the property, sell them and take all the cash and then dump it off on 10, 11, 12 property you have. Now you have all of them free and clear. Basically now you didn't have to pay extra money to pay it. You just took all the equity you have from property number 11 through 20, 25, whatever it is that you decide to keep going. Take all the equity you made from the appreciation of these property and then pay off your 10, 11, 12 property. And that's another way to actually do it without stopping at number 10. All right. Now I want to address the older folks right now that doesn't want to buy no more property. They got to 10, they go, that's, I don't want to buy no more property. I'm good. I just want to pay them off. So this is how you go about paying off your property. So what you do, you take the 10th property and you take the lowest mortgage first. And that's probably the one you bought first. Typically you take the lowest mortgage one first, and then you're going to start actually making payment towards this property. You're going to put extra payment towards this property. You can take your earned income, any positive cash that you get from all the other nine units, you keep dumping it down on the first property. We call this a snowball effect. You keep dumping it. Then when this is paid off, then you repeat the process. You do it to property number two. And then when that gets done, then you actually do it to property number three and then so on and so on until all the properties paid off. If you do this right folks, you can get this thing put out very rapidly because the snowball effect, it gets bigger and bigger and bigger as you go towards number five, going towards number 10. So here's a bonus tip for you about monthly payment, how much interest you save when you actually make extra payment. Check it out. Let's say you have a mortgage of $300,000. Let's say you have an interest rate of 6% on a 30 year fix. Your monthly payment principal interest is about $1,800. Okay. If you make one extra payment every year, at the end of the year, you make one extra payment and you write it principal only towards your payment. So you have 12 regular payments. And at the end you make one extra payment principal only. You turn that in. You will shave almost six years of your 30 year loan and you will save about $76,400 in interest if you make one extra payment. If you do it every quarter, right? Principal only. That's for extra check at the end of every quarter. Okay. At the end of the year. Okay. You will save about $176,000 worth of interest and you're going to shave off 13.8 year, 13 year, eight month of your 30 year loan. Now, if your ambition, you got good money coming in, you decide to pay one every single month. Every month you write one check and then you have another check towards principal only every month. You're going to save about $276,000 worth of interest and you're going to shave off about 21 year of your 30 year. Now that's a tip for you guys that when you want to make extra payment, you can think about that and that's how you pay down your property faster. All right. You got, that is a wrap. I hope you all like what we showed you out today and how you can actually buy 10 rental property here within the next five years by using this BRRRR strategy. This is the strategy that someone taught me how to do and I'm still implementing it today and I'm teaching a lot of how to do it all across America. Okay. If you have any questions, comment, please comment in below. All right. If you liked the video, give it a thumbs up. Make sure you guys subscribe to that button for us. Okay. We're trying to hit a major subscriber. Okay. Talk to y'all soon. Peace out.