8-Unit Apartment Building BRRRR Analysis Case Study!

Buying apartment buildings as is requires 25-30% down which you then must leave tied up in the deal.  Instead, you should look for value-add opportunities where you can employ the BRRRR exit strategy (Buy, Rehab, Rent, Refi, Repeat).  That way (ideally), you can get short-term financing to buy and pay for improvements, then get the property assessed much higher and refinance most or all of your cash out.  This real estate BRRR analysis training shows you exactly how to perform this analysis and make sure you don't overpay or get stuck in a "refi" trap! Watch carefully and take lots of notes! If you're interested in learning more, watch our interview with Tim Bratz on apartment real estate investing!

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34 responses to “[REDP] BRRRR: 8-Unit Apartment Building Analysis Case Study”

  1. Mike says:

    I would to in DC or Maryland

  2. Clay Williams says:

    The flyer says the average rent was $750. How far away from the unit do you search to justify the new $1300 rent rate? Would you compare the rent rate for an apartment building that has lots of amenities? How much do you discount if my building has no amenties?

    • Daniil Kleyman says:

      The units are massively under market and could rent as is higher, but after serious improvements, they’ll definitely fetch $1300. I know buildings personally in the same area getting $1400-1500 for 2 bedroom apartments

    • Daniil Kleyman says:

      And yes, I am discounting some because no amenities. If there was a pool, gym, etc. I’d be ballparking $1400+

  3. Thomas Rodgers says:

    How do you determine ARV step by step.

  4. Richard says:

    My brother and I own 5 acres (free and clear) in a desirable area of west Tennessee in which we are planning to develop as residential homes. Would consider a JV with established, experienced, developer. RehabValuator Premium subscriber.

  5. Thanks Again good information, what is the best way to get the market cap rate for a area?

  6. 62 yr old
    carpenter 10 yrs
    design builder 25 yrs
    part time realtor 92- 97, 2008-2010
    2008 we were 600k in debt.
    Sold everything to survive. We have no equity. And renting ever since. Carrying 178k in Student loan debt and 4k truck loan. 4k credit card.
    Do you have a program for me?
    A bad floor suit force my wife and I to bankrupt could not afford to fight it.

  7. John Lambert says:

    Daniil you’re the man, you make it look so easy.
    I know that in the example you were looking at the BRRR method but this could easily be used to increase value and just flip, right?

    • Daniil Kleyman says:

      John – that’s absolutely correct! You can do the same thing, increase value of the building and then sell it!

  8. This video was everything! I followed it step by step to analyze deals and it was great!

  9. Denise says:

    Can you send this to my email

  10. Can I use the same analysis for 2-4 units property? I’m in the San Diego market. thx

  11. Rasheed Abdul-Ali says:

    Everyone says there’s no good deals on Loopnet. Would it make sense to make offers on Loopnet deals by plugging in the numbers that make the deal profitable? In other words could you submit”low ball” offers on Loopnet?

    • Daniil Kleyman says:

      Nothing wrong with making lowball offers as long as you’ve run your #s. You’ll get rejected most of the time but who cares? The one out of twenty that gets accepted will be a good deal!

  12. Mr Toby J. Henderson says:

    This seems more reasonable I understand commercial enough now.
    Our plan was to go into these deals yet I notice the return on cash it seems really low in this circumstance. Although commercial funding does seem more abundant you would have to get your hands on these deals at rock bottom price.

    We have about 4 more months of sweat equity to put into these deals here yet we will be set up with mammoth returns. Our revolving credit to debt ratio is huge yet its mostly zero percent interest. When that number goes down we will almost pure profit. And with our inventory almost paid off it took many years. These last two deals have been brutal yet the ROI is the largest ever. I look to pay each investment off in 3 years or less since our time is our most valueable asset. In commercial these ROIs seem virtually impossible.

    It seems more like 10 cap is what people are looking for in commercial where as I want to own the entire building in 3 years. What are your thoughts on this?

    • Daniil Kleyman says:

      Initial cash on cash is lower because construction costs are so high. Research cap rates and how they TRULY should be used. You shouldn’t make general assumptions about cap rates. In some areas, 10 cap is still normal because there is higher risk – these are Class C and D areas. Other areas, 5-cap is normal – Class A areas. It really varies.

  13. Hello Daniil,

    This was another incredible detailed thorough impressive presentation utilizing your Rehab Valuator software. Thank you.

    From the time you first found the deal on Loopnet, to the research, then applying final updates on your analysis, just before you begin to negotiate with the seller, how much time did spend on this entire process?

    Thank you, again, Daniil, for everything you provide to your students. All the Best!!!!! Michael

    • Daniil Kleyman says:

      Michael – you can do this entire process in literally the time I showed in the video. 10-15 minutes. And you’re welcome! 🙂

  14. Howard Burnett says:

    What do you mean when you say your leaving money in the deal?

    • Daniil Kleyman says:

      “leaving money in the deal” means just that: leaving your own cash or your partner’s cash permanently tied up in the property (versus refinancing it all out)

  15. Ricardo says:

    Great Analysis, and it is great that I found you because there is another company that wants to charge me 35K for this software and some coaching.

  16. Rafael Diaz says:

    Hi Andres! Thanks for the feedback we are glad to hear you are making use of the software.

  17. Rita Weinstein says:

    Very informative. Thank you!
    What about if you find a 8 unit property that is rent stabilized and you don’t want to make any upgrades. Would this type of deal be more attractive?

    • Daniil Kleyman says:

      It’s much harder to get equity when you buy something already stabilized. It’s less work for sure, but you’ll make less money. And you almost certainly won’t be able to refi and get your investment out quickly if you buy something already rehabbed and rented.

  18. Pam says:

    Daniil
    This BRRRR technique is really incredible, can’t wait to build some serious wealth!!! You make it so easy to understand and RV removes the fear of making investing mistakes. WOW and thanks!

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