The Incredible Power of Long-Distance BRRRR Investing | BP Podcast 301

TL;DR

Learn long-distance BRRRR investing from Alex Felice's experiences and insights.

Transcript

this is the bigger pockets podcast show 301 you're listening to bigger pockets radio simplifying real estate for investors large and small if you're here looking to learn about real estate investing without all the hype you're in the right place stay tuned and be sure to join the millions of others who have benefited from bigger pockets calm your h... Read More

Key Insights

• Alex Felice emphasizes the importance of building a team, including a property manager, realtor, lender, and contractor, to successfully invest in real estate long-distance.
• The BRRRR strategy involves buying, rehabbing, renting, refinancing, and repeating, allowing investors to recycle their capital and scale their portfolios.
• Alex highlights the significance of knowing your market well, which enables quick decision-making and reduces the need to physically visit properties.
• He discusses the delayed financing exception, which allows for quicker refinancing and access to capital, enhancing the efficiency of the BRRRR strategy.
• Alex advocates for living broke on purpose to save capital for investments, demonstrating financial discipline and long-term planning.
• Networking and education are crucial for overcoming hurdles in real estate investing, as they provide the knowledge and contacts necessary to solve problems.
• He shares his personal experience of overcoming fear and taking action, which is essential for success in real estate investing.
• Alex's approach to investing is driven by obsession, which he believes is key to achieving success and making informed decisions.

Questions & Answers

Q: What is the BRRRR strategy?

The BRRRR strategy stands for Buy, Rehab, Rent, Refinance, Repeat. It involves purchasing a property, rehabbing it to increase its value, renting it out to generate income, refinancing to pull out the invested capital, and then repeating the process with another property. This allows investors to recycle their capital and scale their portfolios efficiently.

Q: How does Alex Felice build his out-of-state real estate team?

Alex emphasizes the importance of having a strong team for long-distance investing, which includes a property manager, realtor, lender, and contractor. He advises finding rock stars who are top producers and can bring value to the team. Building relationships with knowledgeable and experienced individuals is key to managing properties successfully from afar.

Q: What is the delayed financing exception, and how does it benefit BRRRR investors?

The delayed financing exception allows investors to refinance a property shortly after purchase, bypassing the typical six-month seasoning period. This enables investors to access their capital faster, enhancing the efficiency of the BRRRR strategy by allowing them to quickly move on to new deals and scale their portfolio.

Q: Why does Alex Felice prefer not to visit properties in person?

Alex believes that physically visiting properties can be a hindrance rather than a benefit, as it may lead to unnecessary involvement in tasks that can be delegated. By focusing on building a reliable team and knowing the market well, he can make informed decisions remotely, saving time and resources while still achieving successful outcomes.

Q: How does Alex Felice overcome the fear of investing long distance?

Alex overcomes the fear of long-distance investing by being well-informed about his market and building a strong team he can trust. He advises focusing on education and networking to gain confidence and emphasizes the importance of taking action and learning from experience, rather than being paralyzed by fear of the unknown.

Q: What role does living broke on purpose play in Alex's investment strategy?

Living broke on purpose is a financial discipline strategy Alex uses to save and allocate capital for real estate investments. By minimizing expenses and prioritizing savings, he ensures that he has the necessary funds to take advantage of investment opportunities, which is crucial for executing the BRRRR strategy and scaling his portfolio.

Q: What are the key factors to consider when analyzing a potential BRRRR deal?

When analyzing a BRRRR deal, Alex focuses on being all-in at 75% of the property's after-repair value (ARV), ensuring a positive cash flow, and understanding the local market dynamics. He advises knowing the rental potential, rehab costs, and ARV to make informed decisions quickly and effectively.

Q: What is the most important lesson Alex has learned from his real estate journey?

The most important lesson Alex has learned is the power of obsession in achieving success. By obsessively focusing on his goals, continuously educating himself, and building strong relationships, he has been able to overcome challenges and scale his real estate portfolio. He believes that consistent action and dedication are crucial for long-term success.

Summary & Key Takeaways

• Alex Felice shares his experience with long-distance real estate investing using the BRRRR strategy. He emphasizes the importance of building a reliable team and knowing your market well to make informed decisions without visiting properties.

• The BRRRR method allows investors to recycle their capital by refinancing properties quickly, thanks to the delayed financing exception. This strategy is ideal for those looking to scale their portfolios efficiently.

• Alex's journey highlights the value of living broke on purpose to save for investments, and the need for networking and education to overcome challenges. He believes that obsession and taking action are key to success in real estate.