We interviewed Matt Mckeever a Real Estate investor and entrepreneur who follows the BiggerPockets BRRRR strategy.
In Episode 5 of our real estate podcast we interviewed Matt Mckeever. Matt McKeever is a Real Estate Investor, YouTuber, a registered CPA, event planner, and co-founder of the Real Estate Rat Pack. At the age of 31, Matt became a full-time Real Estate Entrepreneur by beginning his investing journey in London, Ontario.
We talk to him about how investors need the right mindset to achieve success as well as how he leveraged the BRRRR strategy to achieve such fast growth.
Below we pick out some of the key points from our interview with Matt McKeever. We focus on how the BRRRR strategy works, and why the mindset of investors is so important if they want to succeed in building wealth through real estate. For the full interview watch the video above or listen in on your favorite podcast channel.
“People overestimate what they can accomplish in a year and underestimate what they can accomplish in a decade.”
– Bill Gates
This quote resonates powerfully with me and has really influenced how I think now. These days I have really big hairy audacious goals. I love thinking massive because my thoughts are, shoot for the stars, and worst case you’ll hit the moon. These days I’m just constantly asking myself can I accomplish more over the long term if I just think bigger.
What I’ve discovered personally with time is that you really have to commit to these big goals. However, having big goals is kind of scary, it can be scary to introduce them to the world because the world at times can be a harsh place.
A lot of people are unfortunately like crabs in a bucket. When one crab tries to climb out, the rest will pull them back down. Because of this, sometimes when you’ve got those big scary audacious goals it can be scary to share with anyone for fear that they’re gonna poke holes in it or they’re gonna try and tear it down. However, if you’re not comfortable with your goals and saying them out loud in a public forum, I have to question your level of dedication and commitment to them.
The BRRRR investment strategy stands for “Buy, Renovate, Rent, Refinance, and Repeat”. Without spending a lot of time on it what this means is that you go find an underperforming property that’s been neglected, then you renovate it, you bring it up to its most efficient use by implementing strategic renovations.
Doing this means we’re getting a bigger bang for our buck. It’s not like $1 in creates $1 of value, instead, $1 in should make more than $1 out. Strategic renovations, things like (at least in my market) adding dishwashers or laundry to units can allow us to command a higher rent price.
Then the next part is to rent out the property. We’re buying undervalued, renovating to bring it up to its highest best use then we’re gonna rent it out and once we rent it out then we’re going to command top dollar because we fixed up the unit.
Now because we fixed up the unit because we’ve commanded top dollar renovations its increased the value. I can then show I’ve increased the value because I’ve dramatically increased the rent. The next step is to refinance. Ideally in a perfect BRRRR the whole goal is to get all your money back at this point which allows you to repeat.
Because we’re able to implement in this manner we can be really effective with how we go about building our portfolio. For a lot of new investors, one of the things I find that they struggle with is capital. They save up enough money to finally buy a property, but then they can’t see a clear path on how to scale the business.
In general, for the BRRRR properties that I have documented on my youtube channel, I would be able to complete the project anywhere from eight weeks to a year and that allowed me to recycle my money a lot faster. I could reuse the same down payment funds again and again, as long as I was implementing the BRRRR strategy.
Read: 10 Amenities that will Increase the Value of Your Rental
I first stumbled upon flip to yourself strategy here in Ontario but it wasn’t until I left my day job in 2016 that I found Bigger Pockets. This really crystallized it for me. It was just such an easy way to explain the business model. And a lot of the markets Brandon Turner was looking at weren’t dissimilar to my market.
For myself, I find that one of the most important keys to success is just believing that it’s possible first. We need like a Roger Bannister to run that four-minute mile first. And for myself, Brandon Turner was kind of like my Roger Bannister.
I’ve made a lot of mistakes. I think this one is kind of cliche but I’ll get it out the way – I regret all the properties I didn’t buy. I regret all the deals I didn’t do.
The mistake I see in a lot of other first-time investors is hiring the wrong people. Often we hire available people rather than the right person. With time and experience, I’ve realized that to really build a successful, scalable business, and to make it a business rather than a real estate hobby, you really need to focus on who you hire or outsource to.
This allows you to focus on your best use of time. My highest use of time, for example, is deal analysis, deal structure, and negotiating. This is how I can really move the needle. Whereas, painting the rental myself, or negotiating with tenants over ten dollars or something like that is a waste of my time.
Selecting tenants is also critical. I’ve had one or two horror stories with tenants.
I’ve done a little bit of everything. I self-managed at the start, then moved to outsourcing, and then brought it all back in-house to in sourcing and I actually started my own software company for landlords in Ontario Canada.
The way it works today, I’ve got two people that work for me full-time. One manages my old portfolio so all the little duplexes and four-plexes which has something like 60 to 80 units. And then I’ve got another business that’s about a year old now. This takes the same principle but just goes after 10, 20, 30 unit buildings and so we hired a different type of property manager for that portfolio.
“Everything you want is on the other side of hard work.”
– Matt McKeever, Real Estate Investor
For me, the very first thing is investing a little bit into your mindset and really believing it’s possible.
Tim Ferras has a great quote, “if more information was the answer we’d all be millionaires with six-pack abs” because making money and being in shape are actually pretty simple concepts overall. It’s consistent action, being persistent, and putting the work in consistently that’s really difficult for us.
Ultimately, what this equates to is make more offers to get more deals. You need to put in the reps, you need to put in the practice and understand there are no silver bullets, there’s not one thing I can tell you that will convince any seller to sell to you.