Everyone is talking about a BRRRR strategy? What is it? We have a real-life example to show you from Windsor Ontario Canada, but you can use the BRRRR strategy anywhere in Canada.
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The video is located at the bottom of this article.
Real-Life Example BRRRR Strategy | Real Estate Investing - Windsor Ontario Canada
Hi everyone. This is Aditya.
You know, sorry, first of all, I'm so sorry.
I'm a little bit sick. So bear with my voice.
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So, you know from the last few days many of my clients asking me about you know, what type of properties are a good fit or you know, how do I know a property is a good fit for to do a burst strategy.
So I saw a property on Market, which is currently on the market on MLS Windsor.
I feel that it is a good fit for the BRRRR strategy.
So I'm gonna walk you guys through the property and talk about why this type of property is a good fit and also talk about in general what kind of things I look for when I'm looking for a property either for birth strategy or forward. A new ad in the property.
So let's walk through the property and see what are the things and talk about, you know how to make sure that you're buying the right property.
So first of all, this is the entrance for the unit and it's a living room and right off the bat. I can see the floor.
It's almost like, you know, it's nice. Nice wood floor, but it's kind of gone.
So I would throw in a new laminate. So I would look for the floor first thing. It needs to be done. And the painting you can see the paint is peeling off everywhere.
It's kind of looks odd.
So that's the second thing paint flooring and common in.
These are the bedrooms.
It's a three-bedroom unit on the main floor and in the basement.
That's where the value is we can add a new washroom and kitchen and two bedrooms, but we'll go there before we go there.
This is the main bedroom on the main floor common in the same thing flooring painting you can see the living room is a different paint and here it is a different paint and he was trying to do something with the closet again. It's all look super odd.
So it's a good size, but I would change that so and the doors so through a nice white door it cost you like maybe a hundred bucks, but it changed the look.
And also the trim so this was the old-style trim, but right now if you're anyways changing the flooring, I would throw a nice white trim that gives a nice look for the house and here.
This is our closet. It's a very smaller look like I can fit it.
So that's it. This is a closet the other one in the other room. It was a big one. So I was thinking I would usually maybe I will do another cut this wall make it bigger closet here and the same size on the other side.
So again, same thing painting flooring that's the basic things. I always look for That's another bedroom. Same thing.
And this is where the value is now, you know, the properties will be sold or rented quickly if the kitchen and the washroom are in either modern style as a nicely updated version.
So what I'm gonna do if I buy this property I'm going to rip off all the cabinet's because those are all super old, but it's a good-size kitchen.
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Everything is gone.
Throw a nice backsplash.
Nice white colour IKEA Cabinets Ikea or Home Depot have you know, the base model in the white cabinets.
They're like economical.
You can probably get like all the required claw cabinets for this year's kitchen, maybe 2,500 so you will be able to replace the whole thing with nice cabinets and a nice countertop.
Backsplashes that match go nice with the paint and with the floor.
So again the floor is nice nicely done tile.
But again, if you're changing it into white maybe it doesn't go with nicely with a whiter cabinet. So I might just throw a nice laminate.
Sorry vinyl on top of it. So why not sheets maybe you don't even have to remove the existing. Thing tile just put on top of it or if you want to do even nice like put some extra money just take off the towel and put a nice style that matches the countertop and backsplash has so again window need to be replaced.
It's gone and the second value biggest value you're going to add is the washroom so you can see See right off the bat. This is the old style.
I would throw a hundred bucks buy a new vanity that looks good toilet.
It's a little smaller and to say so I would go through another hundred bucks buy a new one.
Same thing mirror. Look how ugly it is.
So change it makes a nice mirror which fits in a nice light.
And the toilet I would change that because it's already a table should be gone. It's it's in rough shape with the tiles here, you know, if it matches with your tub and the floor here, you can keep it clean it up nicely, but I would do it. Like totally that goes along with the paint and the kitchen because that way Keeping consistent, even if you end up spending an additional thousand or 1500 bucks instead.
I would go for it because of the kitchen and washroom.
The combination of colours will give a lot of value.
So the reason I say this house is a good fit for birth because a couple of reasons one not just because of you're adding value by renovating the kitchen and the washroom, but But also there is an opportunity to add a new washroom in the basement and a bedroom in the basement.
So that's the reason because now I pulled some comparables right now. This is a four-bedroom like a three plus one bedroom in the basement and three bedrooms that you have seen in the main floor 3 plus 1 they're selling it for 129 asking price if this is fixed.
Nicely without adding a new bedroom new washroom.
It will be selling for like 171 9172 190 between but if you add a bedroom and additional washroom the values I pull comparables for five-bedroom two-bath. So now it's a technically five-bedroom two-bath.
It could sell for three to fifty to three 280 so 250 to 280.
That's where the comparable shows in this area and the advantage for this property. It has a garage so that needs some work too but it has worked. But if you do that, right, it has super solid value. So let's check it out. Why what where I see the value to add a bedroom in the basement?
Okay, so this is the basement and the good thing is the previous owner. He already throws a rough-in for the washroom.
So I would take this whole setup and put it elsewhere either here or that corner and you can put a washroom in this pot because they already have the Ruffians and it's updated Plumbing. That's good and come on over here.
So the good thing is it's a good height. So basically I would say probably 6.10 or maybe seven-ish height.
So this is a kitchen.
I don't know what he has done or I don't know why it was super dead.
But you can put a nice kitchen here just throw take this all off and throw some nice cabinets and a nice countertop. The same thing that we discussed upstairs also makes the window size.
Bigger because now it you're kind of making a basement in-law Suite so the basement bedroom. I was telling an additional bedroom here this one so it's a small unit in the basement.
You don't need a big living room. So if you're making a nice kitchen there, then this part will be has a living room and that one will be the bedroom.
So I see that this unit. This part is good enough for the kitchen and living and this one could be a bedroom because there is enough close enough room for a closet and enough room for a bed.
It's like I can see that it's like 12 feet at least 12 by 10 so which is good enough for a bedroom with a closet.
So that's a value add-in.
And this is the existing bedroom already has a good size probably twelve by twelve and a good-sized closet.
So so the thing is you don't have to touch the flooring here basically need to fix it up a little bit flooring just needed some cleanup because the the the tile is in a good condition though.
Maybe you need to do some drywall work and then a new kitchen new one. Mushroom drywall works new windows because that's a to for someone to live in the basement.
The windows need to be egress which is like the general rule is a human being should fit in if there is any emergency anything fire exit or enter any unexpected things happen in the property if the fire department should be in a position to pull the book, guys, out. So that's the Concept so two three four new windows in the basement.
So the end of the day if you put in my system from my experience this property probably needs like 40 to 50,000 and if you can purchase this property for even for asking price 130 plus 50,000.
So you're at 180 thousand.
So after a renovation, this property without a question the value will be at least the minimum would be 240 and based on the comparables. I would say even it can go up to like 280 again depends on how much rents you will be able to get so from my experience in this area this size two-bedroom unit in the basement because of the height you can rent it for $1,000 and the main floor 1300 and the garage may be another hundred or a hundred and fifty so you can probably get like 2400 close.
Rent, so that's a conservative number I'm saying if you're doing it super nice, you can even get more rents because this one is like literally five minutes to University by bus by walk 10 minutes so that close it is and the super quiet neighbourhood.
So what I look I always make sure that what is the purchase price?
Oh, how much are the renovations I have to put in so after the renovation That's what would be the potential sale value?
So for that, how do I know? I'm going to pull comparables.
So for this one, I will pull I pulled comparables for four-bedroom one-bath and I pulled comparables for five like future expected what future value based on the renovation that we're going to do comparables for that.
So five-bedroom two-bath.
I pulled comparables on that in the Walkable distance to this property wherein the last couple of months the recent sales So based on that now I know what the future value would be. Now. I know how much I can spend. So the simple calculation is let's say a future value is 250,000 then 80 percent loan to value which is like 200,000 so when I'm doing brr, I want to make sure purchase price plus improvements should Be 200,000 because your future value is 250 so that you can pull all your money out. That's the that's what the whole bird strategy is. You want to make sure you want to pull all your money or at least most of your money.
So I hope I added some value. I hope I gave you some insight in this video.
Let me know what you think of this property. Let me know what you think of the bird strategy.
Let me know.
You know, what do you think in general of mine?
Ideas on this property and with that thank you very much for watching if you haven't subscribed even now please do so so that encourages me to make more videos and hit the like button and comment below to let me know your thoughts. Thank you very much.
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