BRRRR for Beginners: How to Build Massive Wealth with This “Dead” Strategy

Summary

BiggerPockets Real Estate Podcast: BRRRR for Beginners—How to Build Massive Wealth with This “Dead” Strategy

Episode Release Date: March 5, 2025

Host: Dave Meyer, Head of Real Estate at BiggerPockets

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Introduction to BRRRR Strategy

In this episode, Dave Meyer revisits the BRRRR strategy with seasoned investor Laika Devata, dissecting its viability in today’s challenging real estate market.

Dave Meyer [00:00]: “This is still the fastest way to scale your rental property portfolio in 2025.”

Understanding BRRRR: A Refresher

Dave begins by outlining the BRRRR acronym, emphasizing its components:

1. Buy a property.
2. Rehab to add value.
3. Rent out the property.
4. Refinance to pull out equity.
5. Repeat the process with a new property.

Dave Meyer [00:26]: “Even with today's interest rates, it could still work if you get creative.”

Brandon Turner adds historical context, noting BRRRR’s initial ease of execution in the 2010s but acknowledges the increased complexity due to rising interest rates and costs.

Brandon Turner [01:23]: “Was relatively easy to pull off.”

Current Market Challenges and Adaptations

Dave and Brandon discuss the skepticism surrounding BRRRR's effectiveness in the current market. However, they assert that BRRRR is not obsolete but requires modification to navigate higher interest rates and recapitalization costs.

Dave Meyer [01:26]: “But today...it is much rarer to have everything go perfectly.”

Guest Spotlight: Laika Devata’s Innovative BRRRR Approach

Laika Devata, a prominent investor and broker in Seattle, shares her decade-long experience and how she has adapted the BRRRR strategy to maintain its efficacy.

Laika Devata [02:25]: “After flipping almost a hundred units, I can tell you that I have learned a lot more than just flipping properties.”

She explains transitioning to BRRRR three years into her investment journey, influenced by a mentor who emphasized holding properties for long-term wealth.

Laika Devata [03:51]: “If you keep flipping homes, all you're going to be doing is a job.”

Creative Implementations in Seattle’s Market

Laika delves into specific strategies she employs to modernize BRRRR:

1. Accessory Dwelling Units (ADUs): She highlights building detached ADUs (DADUs) to maximize property value without compromising aesthetics.

   Laika Devata [05:16]: “Once I rent it out, I actually can make great cash flow.”

2. Land Banking: Purchasing distressed properties, stabilizing them, and holding the land for future development.

   Laika Devata [07:02]: “I love distressed property.”

3. Using DSCR Loans: Leveraging Debt Service Coverage Ratio loans to finance properties based on their income potential rather than personal income.

   Laika Devata [07:17]: “Once I put that loan, I am good to hold it for the next few years.”

Case Studies: Real-World Applications

Deal Example 1: No Capital Outlay

Laika shares a remarkable deal where she didn’t invest her own money:

• Purchase Price: $300,000
• Rehab Costs: $50,000
• Post-Renovation Appraisal: $480,000
• Financing: Secured a DSCR loan for $300,000 and partnered with a private lender for the remaining $50,000.

Laika Devata [09:58]: “I have about $50 grand into fixing it up. Total acquisition and rehab was 350k.”

This structure allowed her to maintain cash flow without initial personal investment.

Dave Meyer [16:04]: “I want to scale...I want to hedge my bets and put it across multiple different properties.”

Deal Example 2: Utilizing Zoning Changes for Maximum Equity

Laika discusses leveraging zoning changes to add significant value:

• Property Type: Duplex on a corner lot.
• Strategy: Building additional units in the backyard, capitalizing on new zoning laws to construct multiple ADUs or cottages.

Laika Devata [24:33]: “So that means they can literally sit in their living room and build in the backyard and walk away with millions of dollars of equity.”

Navigating Modern Financing Challenges

Laika emphasizes the importance of creativity and responsible leveraging in today’s market. She advises against over-leveraging and highlights the necessity of having backup funds for unexpected expenses.

Laika Devata [12:28]: “Never over leverage. I always have to keep aside funds for incidentals.”

Strategic Networking and Community Building

Building a strong investor network is pivotal. Laika shares her success in creating community through meetups and online groups, which has led to lucrative off-market deals.

Laika Devata [34:17]: “Go to your local Facebook real estate groups. If there are none, you can start your first Facebook group for that city.”

She underscores the value of providing consistent value to build trust and attract potential partners and deals.

Advice for Aspiring BRRRR Investors

Laika offers actionable tips for investors looking to implement BRRRR:

1. Start with Strong Community Engagement: Participate in or create local investment groups.
2. Focus on Value-Add Opportunities: Seek properties where renovations can significantly increase value.
3. Leverage Diverse Financing Options: Utilize DSCR loans and private lenders to maximize capital efficiency.
4. Stay Adaptable: Be prepared to adjust strategies based on market conditions and zoning laws.

Laika Devata [37:11]: “Continue to educate yourself. The BiggerPockets conference is an amazing way to find investors.”

Conclusion: The Enduring Power of BRRRR

Dave and Laika conclude by reinforcing that while the BRRRR strategy requires more creativity and adaptability in 2025, its core principles remain robust for building substantial real estate wealth.

Dave Meyer [21:23]: “It's still a way to accelerate your equity growth while you're able to hold on to properties long term.”

Laika Devata [37:11]: “There are lots of deals out there. By putting yourself out there, you can find them.”

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Notable Quotes with Timestamps

• Dave Meyer [00:00]: “This is still the fastest way to scale your rental property portfolio in 2025.”

• Brandon Turner [01:23]: “Was relatively easy to pull off.”

• Laika Devata [02:25]: “After flipping almost a hundred units, I can tell you that I have learned a lot more than just flipping properties.”

• Laika Devata [09:58]: “I have about $50 grand into fixing it up. Total acquisition and rehab was 350k.”

• Laika Devata [34:17]: “Go to your local Facebook real estate groups. If there are none, you can start your first Facebook group for that city.”

• Dave Meyer [21:23]: “It's still a way to accelerate your equity growth while you're able to hold on to properties long term.”

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Key Takeaways

• Adapt BRRRR to Current Markets: While traditional BRRRR was easier in the past, modern investors must integrate creative financing and value-add strategies to sustain growth.

• Leverage Community and Networking: Building a robust investor network can unlock exclusive deals and partnerships essential for scaling.

• Diversify Financing: Utilizing a mix of DSCR loans, private lenders, and strategic partnerships can enhance capital efficiency and investment returns.

• Stay Educated and Flexible: Continuous learning and adaptability are crucial in navigating the evolving real estate landscape.

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For aspiring real estate investors, this episode underscores the enduring potential of the BRRRR strategy when executed with innovation and strategic foresight. Laika Devata’s experiences provide a blueprint for overcoming contemporary market challenges and achieving substantial wealth through real estate.

Transcript

[Dave Meyer]

This is still the fastest way to scale your rental property portfolio in 2025. You buy a house, you renovate it, and then pull some or all of your equity out and then buy another. Even with today's interest rates, it could still work if you get creative. Hey everyone, it's Dave Meyer, head of real estate investing here at BiggerPockets.

[Brandon Turner]

Today on the podcast, we are revisiting.

[Dave Meyer]

An old friend, the BRRRR strategy. If you're not familiar with this strategy, here's how it works. First, you buy a property that's the first B. Then you rehab that property, which will add value. Then you rent out that property. And next you refinance the property. And this is the key step because if everything goes according to plan, you increase the property's value enough that you can pull back out most or all of your cash from your down payment and renovation budget. And then the last R in the BRRRR acronym is repeat that process with a new property. And if this all goes how it should, brrrrs can be incredibly powerful because at the end, you own a newly renovated cash flowing property, but you still also have most of your starting capital to go put into another deal. And when Brandon Turner and Biggerpockets coined this term back in the 2010s, it.

[Brandon Turner]

Was relatively easy to pull off.

[Dave Meyer]

But today, especially with higher interest rates and higher recap costs, it's much rarer to have everything go perfectly. More often, you're going to have to.

[Brandon Turner]

Leave some of your cash in that.

[Dave Meyer]

Deal or you'll have to accept only breakeven cash flow on the back end. But that does not mean that brrrr is dead. It just means that you need to modify it.

[Brandon Turner]

You need to get more creative.

[Dave Meyer]

You need to do the work as an investor to leverage the BRRRR along with other strategies like ADUs and zoning upside to meet your own financial goals. So today I am bringing on Laika Divatha onto the show. Laika is an investor and a broker operating in Seattle, and she's doing everything I just said. She's using all the tools available to her to modify and modernize the BRRRR strategy so it can still enhance her portfolio. Right now, I'm really looking forward to hearing how she's doing it, so let's bring her on. Laika, welcome back to the Bigger Pockets podcast. Thanks for being here.

[Laika Devata]

Oh my gosh, thank you for having me. It's been a minute.

[Dave Meyer]

How many times have you been on the show?

[Laika Devata]

The main podcast? Just once. I recorded one of Brandon Turner's birthday episodes, and that was in 2020.

[Dave Meyer]

Okay, nice. Well, welcome back. We're excited to have you. For people who didn't listen to that first one, can you just give us a little bio?

[Laika Devata]

Yes, absolutely. I'm Lakh Devta and I mainly invest in the greater Seattle area. I have now been doing this for a good decade and after flipping almost a hundred units, I can tell you that I have learned a lot more than just flipping properties. It's just taught me so much about stabilization, buying, creative exits, and just a whole other piece of education that comes with knowing how to flip a property. Well, it's been fun.

[Dave Meyer]

Why did you get directly into flipping 10 years ago, out of all the.

[Laika Devata]

Different strategies, it was the quickest way to make money.

[Dave Meyer]

Okay, that's fair.

[Laika Devata]

I was giving up my W2 and jumping into something. I didn't know what to do, how to do. I didn't have the money to do long term rentals.

[Dave Meyer]

Okay.

[Laika Devata]

And so, you know, I was like, okay, let's go learn to flip a house.

[Dave Meyer]

Okay. Well, I love it. But today we're actually not here talking about flipping. We're here to talk about the brrrr method. So at what point did you start doing brrrr as well?

[Laika Devata]

I would say about three years after starting to invest in real estate. I met my friend Thatch when and he was like, if you keep flipping homes, all you're going to be doing is a job. If you want to create true long term wealth, then you need to start holding properties. And it just so happened that was just a fantastic time to do burrs because the properties I bought back then, obviously they have under 3% interest rate.

[Dave Meyer]

Maybe you could give us a definition of burr just for anyone who is not super familiar with it, but to me, it's kind of the perfect hybrid between flipping a house and a rental. You kind of get some of the benefits of each.

[Laika Devata]

Right, exactly. So a bird property is basically when you buy a property, you renovate it, you rent it out, you refinance. It could be a cash out refinance or not. Or you leave some money in the deal, but then you repeat the process. And by doing this over and over again, what you're doing is you're buying something that is obviously under market value. And by putting in your sweat equity, by actually doing the rehab and doing the work, you are able to increase like force appreciation and value on that property. And not only that, once you rent it out, you actually can make great cash flow. I know with interest rates being where they are today, it's a little bit more challenging, but trust me, those opportunities still exist.

[Dave Meyer]

Good. Yeah. Well, that's what I want to talk about, because there is this sort of narrative in our industry right now that the brrrr is dead or it's not possible. I think my own experience would speak to that's not true. I'm curious about yours, because you're in a very different market. You're in Seattle. It's expensive. Like, what are the types of deals you're doing right now?

[Laika Devata]

Okay, let's talk about a couple of deals that I did just in the last few months, which I completely was able to utilize the burst strategy. So first I bought a single family home. It was literally something that was on market. Anyone could have bought it. But what was cool about this single family home was that it was on a double street, which means the house was on one street, but the backyard was on a second street. There's few special streets that actually have it. Now what this means is I can build a dadoo in the back, and the dadu would have its own street frontage.

[Dave Meyer]

And a daddy just for everyone is a detached accessory dwelling unit. So when you talk about adus and zoning upside, this comes up a lot. And ADU can mean a lot of different things, but it can mean a second unit in your basement, in your attic that you stick onto the side of a house. A dadu or a dadu is one that is freestanding. It's not touching the primary dwelling. And so it sounds like. Like what you're saying is there's opportunities to build a dadu where it doesn't feel like tucked in someone else's backyard. You're sort of giving them a more single family home experience. Yeah, yeah, that. Than a traditional dadu.

[Laika Devata]

Absolutely.

[Dave Meyer]

Is that the primary type of deal you're doing in Seattle?

[Laika Devata]

No, I'm actually also doing land banks.

[Brandon Turner]

Oh.

[Laika Devata]

So buying property now, stabilizing it. So still buying them very distressed. Because I love distressed property.

[Dave Meyer]

That's how I know you're friends with James Standard.

[Laika Devata]

Yeah.

[Dave Meyer]

Because you buy just the scariest buildings.

[Laika Devata]

I love those. Yeah. So when I buy a distressed single family home, I'm able to fix it up, raise the value so the appraisal comes in much higher. And then what I do is I put a DSCR loan on it. And then once I put that loan, I am good to hold it for the next few years and just land bank on that lot so that I can in few years build more units on that lot.

[Dave Meyer]

I love this idea. This sort of goes in line with a framework that I've been talking about a lot on the show in the last couple months, where talking about upside and the general framework here is that if you can buy a deal that you can at least make break even in the first year, and then there's different, like, upsides to it in two years, three years, five years, like, those to me are good deals in 2025, like, it sounds like you're doing just that. You're buying something, stabilizing it. I assume if you're getting a DSCR loan, most lenders, the reason it's called the Debt Service Coverage Ratio loan, is that they're looking for some ratio between the income of the property and the amount of the debt service. Hence the name.

[Laika Devata]

Right.

[Dave Meyer]

And so most of them, obviously, they want at least one, which means that the rental income will cover the debt service. Yeah, A lot of them look for 1.2, which means that you need 120% of your debt service in terms of revenue. But the reason I'm saying this is because it means like, like they need cash flow positive properties. Right. And so I'm curious, like, what kind of cash flow in a city like Seattle, like, are you able to generate even with buying distress?

[Laika Devata]

Ashley, it's really interesting and we can blow people's minds with this, but you don't even need to have your own money to do this. And then you can just build, like tons of equity in properties. So what I did was I bought a single family home for 300,000. And it's on a corner lot where one side is the home and then on the other side is a detached garage. Now, this city hasn't gone through its zoning change yet, but in six months they're going to actually allow for dadus on this lot. And if they don't allow for dadus, they already allow cottages to be built on the lot. So we can always do those. But what's cool about this is I put about 50 grand into fixing it up. So total acquisition and rehab was 350k. And then when it appraised, it appraised for 480,000. Once I had gone in there, done my magic with the rehab, and also got it rented out. So it rented for about 2,400. So based on the income approach, it appraised for 480.

[Dave Meyer]

Nice.

[Laika Devata]

Which means I was going to get about 300k on a DSCR loan. Now, because I was into it for about 350. What I did was I Got a partner, a private lender that lent me the remainder of my down payment.

[Dave Meyer]

Okay.

[Laika Devata]

And the way that it's structured is that she doesn't get anything now, but in about three years, when we're ready to offload this property, she gets 15% of the equity.

[Dave Meyer]

Oh, wow.

[Laika Devata]

So I don't have any of my money in, but at the same time, every month, we make about $500 in cash flow.

[Dave Meyer]

Wow. Okay. So because you've gotten a private money lender to defer payment for. For three years?

[Laika Devata]

Yes.

[Dave Meyer]

Okay. I'm curious why that lender would do that.

[Laika Devata]

Okay. So this lender, and this is also so interesting because this lender is in tech. She just wants to make passive income. She doesn't care about mailbox money. She just wants to park her money somewhere where in three years, she could make back a bunch of equity. Now, what is that equity we're talking about? Right. So this property today is valued at 480, and that city appreciates almost double every five to six years. So in three years, even if that property is only going to sell for like 600 or 650, that's still a lot of equity that she can get back for not doing anything. And her money is not stuck in stocks. Her money is not sitting on the sidelines. It's actually being put to use.

[Dave Meyer]

Interesting. Okay. I'm going to be honest, I don't know if I'd do that deal as a private lender, but I'm glad you found someone who would.

[Laika Devata]

It's actually surprising how many people you would find to do something like that.

[Dave Meyer]

Well, that's a very interesting deal. It's not like a complicated structure, but do you think, like, newbies could take on this type of deal?

[Laika Devata]

Yeah. So my biggest thing is, and I was given this piece of advice a long time ago, and I am very big on it, Never over leverage. I had the money to bring to the table myself. Like, I had the down payment. If I didn't find a private lender or didn't have someone lined up, I would have funded this deal myself. So I always feel like someone starting new, it's okay to leverage something a hundred percent as long as you have the funds to back it. A lot of people, like, what I see happen is they raise money here, they raise money there. They have no way of making active income if something were to go wrong.

[Dave Meyer]

Right.

[Laika Devata]

And so I just feel like it's important to throw that out. There is make sure that you are secure and that you are not over leveraging beyond what you can pay back.

[Dave Meyer]

All right, I'm glad you said that. Like. And I want to ask you a question about why you leverage even though you can pay for it. But first we have to take a quick break. We'll be right back.

[Brandon Turner]

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[Dave Meyer]

We're back on the BiggerPockets podcast here with Laika Devata talking about the BRRRR method and a couple creative strategies that she has employed in today's day and age. And before the break, like you said that you had taken on a lot of debt. You didn't put a lot of money into this deal, but you have the money to do it. So I get this question a lot. Why? Why would you do that if you could just pay for it yourself?

[Laika Devata]

Great question. Because I want to scale. Instead of doing one property and using all of my money, I want to hedge my bets and put it across multiple different properties. Not just that, I think holding real estate is more expensive than anything else. It could be a tenant not paying, it could be a squatter issue, it could be a roof leak, it could be a sewer line. It could be so many different things, just little things like the carpet needs to be replaced or the wooden flooring has to go or something like that. So owning real estate for me is super expensive in a way. So I'm like, I always have to just keep aside funds for incidentals. So it doesn't mean that I would want to put all that money into one deal. I can always hold it and say okay, if I don't have A private lender, if the deal goes south, then I have rainy day money.

[Dave Meyer]

That makes a lot of sense to me because I sort of struggled with this too, because as I started doing a little bit of private money lending, a lot of the people who I'd consider lending to, like, they could definitely just buy these houses themselves. And I was always kind of like, why would you do that? And like you said, you know, it's a lot about hedging. And also leverage really boosts your return as an investor. Like if you think about the percentage return that you get by using someone else's money, it really accelerates it. So if you're know only have to put in 100 grand to build a hundred grand in equity, that's in 100% ROI. If you're putting 500 grand to get that same 100 grand in equity, yeah, maybe you're making less cash because you're paying someone that interest, but you're only getting a 20% ROI. And so you sort of have to think about the math there. And that's why, you know, banks exist and why private money lenders are willing to do these things, because it can create win win scenarios for, for the lender who's probably just looking for a stable return like Leica was talking about, and growth capital for investors like Leica who want to scale.

[Laika Devata]

And also I think it just makes you more lendable because like you said, if you came to me and said, hey, I want to invest in a deal of yours, you know that I already have the money and I don't need it, I'm not desperate.

[Dave Meyer]

Totally.

[Laika Devata]

You'd rather lend to someone like that than lending to someone that doesn't have that experience or doesn't have that credibility and the bank account. Because then if something were to go wrong with the deal, then your money is gone.

[Dave Meyer]

Yeah, you want like actual collateral and experience.

[Laika Devata]

Right.

[Dave Meyer]

Going back to this sort of narrative that we continuously hear that brrr is dead. Like is this the kind of deal structure you would have done five years ago or have you had to get a bit more creative as market conditions have changed?

[Laika Devata]

So five years ago, if I were to put the same deal in context, my interest rate would have been about 3%. And at 3% I would cash flow about 1200 bucks. And not just that, I could get a lot more leverage from just a DSCR lender. So instead of them only giving me 300k, they would have probably lent up to 380. So I would have actually done a cash out refinance so that's the biggest deal. I think the biggest difference, I think with the BRRRR strategy today, you might not be able to do a cash out refinance, whereas five years ago, four years ago, you could actually still do those. I just did a deal where it was not a cash out refinance, but I didn't put anything in the deal.

[Dave Meyer]

Right.

[Laika Devata]

Like I didn't have to bring any of my own money in.

[Dave Meyer]

Yeah. So you wouldn't expect to get money out if you're not putting any money in.

[Laika Devata]

Right.

[Dave Meyer]

But I'm curious, when you're saying you can't do a cash out refi, does that mean you can't do it at all or you can't do the quote unquote, perfect spur where you're getting 100% of your equity out?

[Laika Devata]

Oh, you can still do it all. It's just that you, for me right now, I'm yet to see a deal that I can do a massive cash out refinance on.

[Dave Meyer]

Yeah.

[Laika Devata]

But I can explain my dadu deal and how I put no money in the deal of my my own, but I ended up with a beautiful house that the bank has financed. 100%.

[Dave Meyer]

Right.

[Laika Devata]

That I don't have to put any money.

[Dave Meyer]

Yeah, exactly. Yeah. I've been talking to a few people about this on the show over the last couple weeks, but I feel like this concept that burr is dead is just people holding on to these expectations that existed in 2017. And that was awesome. It was great, it was easy, but they just don't exist anymore. But that doesn't mean that BRRR is like an ineffective way to build wealth. It still is, at least in my opinion. It's just you need to take a different approach and you might not be able to hit these grand slams on every single bird deal that you do. You might need to just take a little bit less out. You might take 50% out of your equity or even 25%, but the fundamentals of it haven't changed. It's still a way to accelerate your equity growth while you're able to hold on to properties long term. And at least to me, that hasn't changed and I think is unlikely to change.

[Laika Devata]

No, it hasn't changed at all. And I feel like the more creative you can get with buying properties, the more you can even use the traditional Burr method. Like you can find seller finance deals. Instead of doing a single family. If you did a fourplex, stabilized each unit and rented it, you can still do a cash out refinance and you can have positive cash flow. And so these deals still exist. It's just a matter of buying right, but also coming up with a solid exit plan.

[Dave Meyer]

I want to hear about what your exit plans are because you teased that early about creative exits. And I want to know what that means. But I just want to give an example of a bird that I'm sort of in the middle of doing that maybe some people would say is boring or is not a home run, but for me, it just totally makes sense. I bought a deal, it was occupied. And then over the course of a year, as tenants moved out, I renovated each of the units and I invested additional money into renovating them that I paid for that cash.

[Laika Devata]

How many units were they?

[Dave Meyer]

Just to easy to do, mostly cosmetic. There was a couple of systems that needed updated old building. But I put a little bit of more money in. When I go to refinance it, I'm going to be able to take all of my rehab money and then probably another 10% of my down payment out. And so for me, I just added value to the property and I'm putting less money down than I originally did on a deal that was cash flowing on day one and is now going to cash flow significantly better. Did I do it for free? No, I have to leave some money into it. But as a buy and hold investor, I'm okay with that, especially in today's day and age. Like, I don't want to be max leveraged, so I'm okay keeping some money in there. And if you evaluate that by pretty much any financial metric other than like, is it as good as what you did in 2018? Like, it's still a good deal and it's still a good investment.

[Laika Devata]

But also, can you imagine what's going to happen to it if interest rates did go down?

[Dave Meyer]

Right, Totally.

[Laika Devata]

Yeah. You would walk away with so much equity and you can refinance. I mean, there's so many different possibilities.

[Dave Meyer]

Yeah. And, and the value of it will probably go up in that case. But like, even if it doesn't, like, it's still a good deal. And I think it puts you in a position to get both because cash flow is hard to find. And so to me, at least, you need to find these ways to add equity and then hold on. I think the cash flow will get good over the next five to 10 years as rents grow up. But to make it worthwhile for your effort and money in the short term, you got to find that way to add some equity.

[Laika Devata]

Yep, exactly. Um, so I'm Also a real estate broker, and I like doing investment type sales. And so I had this young couple come to me and they were like, look, we really just want to do a house hack. And so I ended up finding them on market a duplex, just like you said. But this duplex, what was cool about it was it was turnkey. So they ended up living upstairs and they're renting out the downstairs. But the duplex on the site has a massive side yard and a huge backyard. So going into that, we knew we could build in the back. And so now that the city has changed its zoning, we just found out last week that they can build about four units in the back.

[Dave Meyer]

Whoa.

[Laika Devata]

So that means they can literally sit in their living room and build in the backyard and walk away with millions of dollars of equity.

[Dave Meyer]

And because it's their primary residence, that's all going to be tax free, right?

[Laika Devata]

All tax free.

[Dave Meyer]

Beautiful. Love that. That. See that? That to me is like this upside framework, right? It's like you're taking your primary residence, you're using an owner occupied strategy, then you're doing zoning upside, then you're doing value add upside. Like you're looking at a deal that if you just looked at it on Zillow, wouldn't make sense. But if you do just that extra level of research about what's possible and how to bring this property to its highest and best use, that sounds like a home run. That's a grand slam deal right there. You know, that's a fantastic deal. So I think that goes to just showing about. Yeah, it's a little bit harder than it was, but the returns are still absolutely possible.

[Laika Devata]

Yeah. Killer.

[Dave Meyer]

All right, I want to talk about steps that our audience can take, like to pursue their next bur. But first we have to take a quick break. Before we go to break, though, I do want to remind everyone that BPCON tickets are are out for sale. We have early bird tickets available. It gives you a hundred dollars off our tickets this year. It's in Vegas. Lake, I know. You're going to be there, right?

[Laika Devata]

I'll be there.

[Dave Meyer]

Are you speaking this year?

[Laika Devata]

I am.

[Dave Meyer]

What are you talking about?

[Laika Devata]

Well, as luck would have it, I am doing a whole workshop on optimizing your portfolio.

[Dave Meyer]

Oh, very cool. So if you want to hear Lake's talk, I'll be talking. All of our other friends here on the Bigger Pockets podcast will be there. Go buy a ticket now, because it is the cheapest. They will be. Go to biggerpockets.com conference and get your early bird ticket today. We'll be right back.

[Brandon Turner]

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[Dave Meyer]

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[Dave Meyer]

Welcome back to the Bigger Pockets podcast. I'm here with Laika. We are talking about Burr. She's given us some examples of the really creative strategies that she's been using in Seattle. Like I'm curious though, are there any tips as an agent and an experienced flipper, experienced Burr investor that you would give to people who want to get into Burr but are finding it difficult in today's market?

[Laika Devata]

Yeah, I mean there's so many different strategies. A lot of them just, you know, starts with finding the property and you can just find them online. You don't even have to go look for off market deals. But I think like rent by room is a really good strategy. Seattle doesn't have this, but a lot of other markets have rent by room specialists that they're like Airbnb operators. You just give them your house and they can run all of it. All of the marketing, screening tenants, I mean it's incredible what they can do. So I tried this in the Raleigh market and it was just, I was like oh my gosh, this is amazing. And so you could just buy a house with lots of bedrooms. You don't even have to fix it up. You can put new paint, carpet maybe that's a great way to increase income.

[Dave Meyer]

Is that different from Burr though? Or Were you saying you would like buy a brrrr, Fix it up and do that, or you're saying you just buy a stabilized house and do that?

[Laika Devata]

You can do both. Going to say this again. I will never buy a turnkey house or even like a minor cosmetic house. I am all about the down to the studs, so I buy them. Crazy. But I'm seeing if you don't want to do that. You can still make a lot of cash flow by just buying something that is more turnkey that was once maybe used as a single family that you could convert to a rent by room.

[Dave Meyer]

All right, great. Well, I think that seems like combining two really good strategies. Right? Like you're taking brrrr and rent by room. Tell us a little about some of the other burst strategies that you've looked at. Like is it mostly based on zoning upside or are you still able to do sort of a traditional, like buy a duplex rehab. A duplex or buy a single family rehab a single family. Or are you mostly focused on adding capacity, adding units in some way?

[Laika Devata]

I love buying triplexes and fourplexes. I think those cash flow so well, especially buying them distressed and then fixing up every unit because there's so many different exit strategies on that. You can rent out three long term and one Airbnb short term. You can condo ise and sell each unit separately.

[Dave Meyer]

Yeah.

[Laika Devata]

You can fix up the property, raise value and raise rents, or you can just sell it as a whole turnkey investment for a 1031 buyer. So I just feel like those have so much potential for different exits that those are my favorite kind. And plus you get a conventional loan on it.

[Dave Meyer]

Awesome. Yeah, that's a great. That's a great strategy. So what are you looking at now? Like, are those the kind of deals you're looking at next or what are your next few moves that you're planning to make?

[Laika Devata]

So I'm the kind of investor that I have my eyes open for any kind of deal. It could be a single family fix and flip. It could be a long term buy and hold. It could be a multifamily deal if it makes sense. And if there's a lot of meat on the bone, then that's the deal that I'm looking for. So I just want a lot of equity that either I'm able to create or it comes existing. Like I just today closed on a split entry home which is three minutes from where I live. The house that I'm buying, I'm buying off market. It is a little bit distressed for 1.1 million. The appraisal came in last week at 1.7 million.

[Dave Meyer]

Oh, my God.

[Laika Devata]

I know. Crazy.

[Dave Meyer]

What?

[Laika Devata]

So I'm just like walking into equity.

[Dave Meyer]

Yeah, just keep doing that.

[Laika Devata]

Yeah. This deal was off market. The seller came to me directly and said that she found me because she's attended some of my meetups and has come to my walkthroughs. So I just feel like social media too has such a big part to play in your investment journey. Like, if you constantly put yourself out there by providing value, it does come back in spades. Like, I do my events just to build community and I do my walkthroughs for free. Like, they can come to any of my flips. I show them the process, my learnings on the project, and it's just helpful for people to know who I am, what I do, and also learn in the process. And that helps to get amazing deals.

[Dave Meyer]

Do you think, like, regular investors can do that? Because, you know, you're. You've been doing this for a while. You host a meetup. Like, how do you recommend someone who's maybe just starting and isn't as confident in their ability to network start making these types of relationships?

[Laika Devata]

Oh my gosh, I'm so glad you asked because a lot of people don't make the effort when you don't have projects. When you're just starting out, it is the best time to build community. Go to your local, like Facebook, real estate groups. And if there are none, you can start your first Facebook group for that city. And if you did that and you just constantly added value, invited people to come be a part of that network, you're not even leaving your house. But you are here creating this incredible online community. And my friend Jan in Seattle started a Facebook group that now has 20,000 investors. And Dave, if you're not part of it, I highly recommend you join it.

[Dave Meyer]

Oh, I think I have to.

[Laika Devata]

You have to because you see off market deals. Like if I want a contractor, a plumber, like little things to big things, I find it in that group. And so you could be starting your own Facebook group, your own Instagram broadcast channel, or just, you know, start a networking meetup. So good. Invite local investors to come speak at it because that builds credibility with experienced investors, but also new investors just like you.

[Dave Meyer]

Awesome. Yeah, that is such great advice. And I. One of the reasons I'm excited to be back in the United States is now I can go network with you and your group and I could just piggyback off all the work that you've already done to build this community.

[Laika Devata]

And what's funny is if I didn't have that meetup group, I wouldn't have started it now, because I feel like I don't need to.

[Dave Meyer]

Right.

[Laika Devata]

But back when I did start it, I was newer and I needed that community.

[Dave Meyer]

Yeah. And I'm only half joking about piggybacking off you, like, I don't need to start one because you've already done it. And I think that's a lesson just for everyone listening, that these. These groups exist. And so even if you're not the type of person who wants to organize something or, you know, has a network to get this thing off, the. If you live in a big city, there's probably already several that you can go tap into. But even if you live in a suburb, you know, I hear people who, in towns that I would never expect, had a real estate investor meet up, you know, towns of 10 or 20,000 people.

[Laika Devata]

Yeah.

[Dave Meyer]

There's still groups of people who want to get together and talk about this stuff. And I think it's a great way, as like I said to one, find deals, but also just build confidence and, like, build a community where you feel like you have a support group to help you through the challenges that inevitably arise as an investor.

[Laika Devata]

And they will arise.

[Dave Meyer]

Yeah, exactly. They always do. That's part of it. But it's more fun to complain about it to your friends rather than just suffering through it alone.

[Laika Devata]

Exactly.

[Dave Meyer]

All right, well, any last thoughts on.

[Brandon Turner]

The state of Burr or investing in.

[Dave Meyer]

2025 Lake, before we get out of here?

[Laika Devata]

You know, I strongly do believe that there's lots of deals out there. By putting yourself out there, you can find them. Just keep at it. Continue to educate yourself. The BiggerPockets conference is an amazing way to find investors, even in your local communities. So come to conferences like that and just put yourself out there, because there are incredible deals to be had. And as Warren Buffett says, be fearful when others are greedy and be greedy when others are fearful. And this is a fearful market right now. We don't know what's going to happen, and it's the best time to get in and find that. That golden egg.

[Dave Meyer]

Yeah, I want to find a golden egg.

[Laika Devata]

Right, exactly.

[Dave Meyer]

All right, well, thank you so much for joining us, Lake. I appreciate it, and I will come to your next meetup. I apologize for not showing up earlier.

[Laika Devata]

Okay, I'll send you all the details.

[Dave Meyer]

Excellent. All right, well, thank you all so much for listening to this episode of the Biggerpockets Podcast we'll see you again in just a couple days.

[Brandon Turner]

Thank you all for listening to the Biggerpockets Real Estate Podcast. Make sure you get all our new episodes by subscribing on YouTube, Apple SP.

[Dave Meyer]

Or any other podcast platform.

[Brandon Turner]

Our new episodes come out Monday, Wednesday and Friday. I'm the host and executive producer of the show, Dave Meyer. The show is produced by Ian K. Copywriting is by Calico, content and editing is by Exodus Media. If you'd like to learn more about real estate investing or to sign up for our free newsletter, please visit www.biggerpockets.com. the content of this podcast is for informational purposes only. All host and participant opinions are their own. Investment in any asset, real estate included, involves risk, so use your best judgment and consult with qualified advisors before investing. You should only risk capital you can afford to lose, and remember, past performance is not indicative of future results. Biggerpockets LLC disclaims all liability for direct, indirect, consequential or other damages arising from a reliance on information presented in this podcast.