BRRRR Multifamily - Can someone please explain the entire process

[Mark Gjani]

I would like to start off introducing myself. My name is Mark and I am new to this forum hopefully I can acquire enough knowledge to bring some additional value in the near future.

The family and I are in the process of looking to purchase an 8 unit in South Florida, I have been recently reading up on the scaling potential of the BRRRR method.

I would like to understand the exact steps we would need to take to successfully execute this strategy. Can someone who has experience with Multifamily BRRRR explain the entire process to me in detail including the risk, what can be done to minimize the risk, loan process , time frames etc

[Richard Rossi]

I just did one and I’m about to buy another property with the cash out.

1. make sure the property will still cash flow (AS IS) even if you don’t remodel it for worst case scenario.
2.Has to be a desirable neighborhood. 
3. Don’t get in too deep if you are new to this, if it’s your first time buy a property that just needs cosmetics. avoid additions, structural issues, support beams etc unless you have experience.
4. Hire the right sub contractors, hiring the wrong or cheap ones will cost A LOT more. If you don’t know how to manage and build hire a experienced general contractor (at least 10 years and good references or big company time)
5. Get the correct permits or else it will be a headache down the road.
6. Make sure the property is zoned correctly.
7. Use mediocre grade materials, nothing fancy, nothing cheap, and use your creativity! 
8. Make sure you have reserves to cover the mortgage and plan for construction costs to be at least another 1/3 of what you expect, and plan on it taking double the time you expect. 
9. screen tenants throughly, know when to say no but also be good to them. put them on a year lease this will help your stability for refinance depending on the type of loan you get. 
10. Refi with a local bank if possible. 
11. It will not be easy, problems will arise, so take it light and have fun. 

Best of luck!