BRRRRS Method

BRRRRS Method Qualifying Properties

One of the Principal Aims of operating a BRRRRS Method Strategy is to achieve NMLI (No Money Left In) after Refinancing following Renovation & Renting to enable the Strategy to be Repeated.

For the benefit of experienced Investors, the BRRRRS Method Strategy used to referred to, as Forced Appreciation.

Only certain Properties are suitable for a NMLI Improvement Renovation.

The Property must need extensive modernisation work including Improvements that will contribute to an increase in the OMV (Open Market Value) over above the cost of the Improvement.

The type of Property that I buy, regardless of Location & Neighbourhood is the Terraced House which represents 27% of the UK Housing Stock and Terraced Houses are located throughout the UK including Northern Ireland.

For the benefit of experienced Investors, the BRRRRS Method Strategy used to referred to, as Forced Appreciation.
Only certain Properties are suitable for a NMLI Improvement Renovation.
The Property must need extensive modernisation work including Improvements that will contribute to an increase in the OMV (Open Market Value) over above the cost of the Improvement.
The type of Property that I buy, regardless of Location & Neighbourhood is the Terraced House which represents 27% of the UK Housing Stock and Terraced Houses are located throughout the UK including Northern Ireland.

Dependent on the Location, there are a number of different Terraced House Floorplans which can be found Online and Wikipedia background history not only for the UK but also virtually Worldwide.

Do take the time to read through the Wikipedia’s pages as they make interesting reading.

The advantages of specialising in Terraced Houses, and particularly those built during the Georgian, early Victorian Periods is that there are still thousands of Un-modernised Terraced Houses throughout the UK with:

  • 2 Living Rooms on the Ground Floor with a rear Kitchen leading into a Bathroom.
  • 2-3 Bedrooms on the 1st

In Valley Locations, such as the Rhonda’s in South Wales, the Properties have 3 Floors, with:

  • Kitchen & Bathroom at Garden Level.
  • Living Room at Street Level.
  • Rising to 2-3 Bedrooms on the First (2nd) Floor.

In all cases, the Bathroom, including WC, are separate from the Bedrooms by at least 1, if not 2 Floors, which is not conducive to 21st-century Lifestyles, as Bathroom & Bedrooms are assumed to be on the Same Floor.

Further, in an Unmodernised Terraced House, there is no provision for a Cloakroom which means that any Visitors have to use the Family Bathroom, which is not ideal.

Because, virtually regardless of Location, Unmodernised Terraced Housing is Low Cost they feature heavily in virtually every Property Auction because the cost of selling through an Auction is less than through an Estate Agent.

The process is also quicker and reliable, because fewer Buyers fail to Complete and Exchange of Contracts occurs when the Hammer Falls.

Ideally you are looking for the following, assuming that your Location & Neighbourhood Due Diligence shows that the Location is the First Choice of the average Tenant or First-Time Buyer living in the area.

This is reasonably easy to check by visiting Local Letting & Sales Agents to find out who they Let or Sell to.

The principal Criteria that I look for Online, before I even think about physically Viewing the Property, and you can copy all this Information from the Auctioneer’s Particulars and Google Streetview are as follows.

  • End-terrace, structurally sound, with no evidence of Subsidence as seen on Google Streetview
  • Mid-terrace, no evidence of Subsidence to either Front or Rear Elevations as seen on Google Streetview

That said, it is highly unlikely that a Mid-Terrace, possibly built over 100 years ago, will suffer Subsidence in the future.

As I am carrying out a Full Gut of the Property stripping all Walls back to Bare Brick/Stone, taking down Ceilings and revealing all embedded Timber Lintels, Beams & Joists, I am not concerned with Damp or Rot as you can repair it at a relatively Low Cost.

The majority of the Cost of carrying out a Damp or Rot Repair in-isolation lies in exposing the Rot, resurfacing, and repainting the affected area, which may extend much further than the Rotten Timber. The same applies to the Damp Course, because exposing the area of Wall needed for a DPC, is part of the Full Gut.

Ideally, I prefer the Rear of the Property to face either South, Southwest, or West to catch the Sun for most of the day. Google Streetview shows the Compass Point in the bottom right-hand corner of the screen.

Internally, I am looking for:

  • 2 Living Rooms through to a Kitchen & Bathroom on the Ground Floor or,
  • 1-2 Living Room leading down to a Kitchen & Bathroom on the Garden Floor.
  • Rising to 2-3 Bedrooms on the First Floor, ideally with the Staircase 10 feet from and opposite the Front Door on one of the Party Walls.

I welcome:

  • Ground Floor Damp & Rot to Floors, Joists & Lintels.
  • Cracked Render to Front & Rear Elevations
  • Rusted Gutters & Downpipes.
  • Lathe & Plaster Internal Walls.
  • Loads of Rubbish so that I cannot walk across the rooms.
  • Walls & Ceilings heavily stained with Nicotine Smoke.
  • Ceilings covered with Polystyrene Tiles.
  • Evidence of Pets Fouling Internally.
  • Lead Plumbing including the Water Main.
  • Avocado Bathroom Suites
  • No Central Heating or only old Night Storage Heaters or Coal Fired Back Boiler.
  • No UPVC Windows & Doors, only Rotten Timber or Metal Frames
  • Heavily overgrown Garden, Front & Rear.
  • No Right of Way across Rear of Property unless at the End of the Terrace with No Exit
  • Dark Paintwork throughout, Brown Woodwork, Blue, Green, Yellow Walls
  • EPC F or G.

Evidence of Recent (6 months) Occupation

My Cookie Cutter Improvement Renovation Specification, Brief Outline.

Investors often think that moving a Staircase is a major undertaking, but it is simply standing on the floor and possibly screwed to a Party Wall. You can relocate a Staircase very easily. I move the Staircase 6’ towards the Front Door which creates a 6’ x 3’ Corridor at the Head of the Staircase.

Part of the Full Gut is to remove all the Internal Walls on the First Floor, all of which will be old Lath & Plaster. When I reinstate the Rear Bedroom Wall, I reinstate it 6’ from the Party Wall resulting in a 6 x 6’ Bathroom at the Head of the Staircase without sacrificing a Bedroom, which is often the case where previous Modernisers often relocate a Ground Floor Bathroom.

Having moved the Staircase 10 feet towards the Front Door, there is space under the Stairs between the Living Room & Kitchen to install a Cloakroom.

In most cases the Drainage is at the rear of the Property and both the Bathroom & Cloakroom will gravity feed into the main Soil Pipe.

I continue by removing the Wall between the 2 Living Rooms generally providing me with a 20’ x 10’ Living Room and replace the Window in the Rear Corner of the 2nd Living Room with Patio Doors allowing instant access from the Living Room into the Garden rather than through the Kitchen.

The existing Rear Bathroom is removed, and the Kitchen extended to the Rear Wall of the Kitchen/Bathroom Extension into which we fit Patio Doors.

The Property is completely rewired, with a High-Level Future Proof Specification.

Gas Fired Central Heating is installed, though this may have to change as Gas Heating becomes illegal.

The Interior of the Property is Dry-Lined, with Insulated Plaster Board and the Roof space insulated with at least 270 mm of Insulation Roles.

To achieve an EPC B Rating you need to Insulate under the Ground Floor with a Kingspan Rigid Insulation Board.

You will find more detail on BRRRRS Improvement Renovations under Renovations.

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