BRRRR Strategy Example

[Allan A Ramirez]

In David Green's book the " BRRRR " method he provides an example of two different guys that acquired properties, Tom and Mike. Tom saved up the same amount of money every year to purchase one property that didn't need too many repairs, he didn't consider his equity in any of them only his cash flow. Mike saves up $84,000 every two years to purchase a new property and fix it up taking into consideration his equity in each deal. David Greene provides an example of how Mike's portfolio will grow over 15 years the example is the following,

Year One: Nothing 

Year Two: Three Homes 

Year Three: Three Homes

Year Four: Four Homes 

Year Five: Four Homes

Year Six: Five Homes

Year Seven: Five Homes

Year Eight: Six Homes

Year Nine: Six Homes

Year Ten: Seven Homes

Year Eleven: Seven Homes

Year Twelve: Eight Homes

Year Thirteen: Eight Homes

Year Fourteen: Nine Homes

Year Fifteen: Nine Homes 

Total: 84 Homes 

Could somebody care to explain this to me, I know Mike will buy a new property that he will be able to start borrowing against every two years, but I also know that he can buy three homes in one year with the same principle he invested in every first home? Thanks.