Real Estate Investing Without the Cash: Jesse Lang’s BRRRR Strategy
This week we have real estate investor, Jesse Lang on the show to talk about investing in real estate without your own money.
Jesse started her journey accidentally through house hacking, and within just 36 months, she scaled from 11 to 70 rental doors—all without using her own money. Her focus on the BRRRR method (Buy, Renovate, Rent, Refinance, Repeat) is a game-changer for anyone feeling like they can't get into the real estate game.
Here are the biggest takeaways:
Leverage over Capital
Jesse uses private lenders and hard money to invest in real estate, allowing her to grow rapidly while offering double-digit returns to her lenders.
Systems are Scalable
Standardizing renovations and targeting congruent neighborhoods save her time and make property management much easier. Consistency means faster analysis and fewer issues.The Value of Accountability
Education and Community Matter
Jesse didn’t do it alone—masterminds, mentors, and constant learning helped her succeed. She now pays it forward with a “Rentals Made Easy” mastermind and book, breaking down the process for other investors.
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Introduction to the Unconventional Investor Podcast
Welcome to the Unconventional Investor Podcast. I'm your host, Michelle Moses, certified financial planner, licensed realtor, and founder of ME Financial. If you're an accredited investor feeling overwhelmed by managing your portfolio and looking for alternative investment strategies that go beyond the traditional stock market, you're in the right place.
Let's head into today's episode so you can start taking control of your financial future. Hello everyone and welcome to the podcast. Thank you so much for listening today.
House Hacking and the BRRRR Method
Today we are going to be talking about house hacking and how you can basically buy multiple doors to of real estate. I'm butchering this, I'm sorry, Jesse with the BRRRR method, and we're gonna explain what the BRRRR method is.
And so to talk about this, I have Jesse Lang to talk with us, and she started investing in real estate by house hacking over 10 years ago and has. Since grown, a substantial rental portfolio that she manages with the help of a small remote team. And in the last 36 months, she's grown from 11 doors, bought the wrong way with 20% down to 70 doors and counting.
She's laser focused on the bur method, which is BRRRR method, if you guys don't know what that is which allows her to put her money to work over and over to create generational wealth. And she partners with private lenders to buy real estate with none of her own money. All while providing them double digit returns on their investment.
Thank you so much for joining us. Thank you, Michelle. Thanks for having me. I'm excited to be here. Yeah. I am excited to talk about this because I, I know about this and I've heard about it. I have never actually implemented it, so I'm excited to hear what you have to say.
Jesse Lang's Real Estate Journey
So why don't we go ahead and start, and you can tell us a little bit about yourself and why you got into this.
Yeah. Yeah. Thank you. So I live in Columbus, Ohio. We were just talking about how bad the weather is, but outside of that it's a great city. It's a great town. Yeah, great town. I am in Columbus investing here, but came here via Austin, Texas. And so I started my real estate journey really by accident, like probably a lot of investors out there do.
I had bought a little condo that I was living in. I was renting out some rooms, so that was the kind of house hacking before I even knew that house hacking was a term. I did that for a couple years, moved on to the next one, bought a new house with, 5% down conventional owner occupant financing, and rented out the first one.
Long term. Your rolls around. Do it again. And then, so I have two long-term rentals. I have roommates where I'm living and I'm like, I don't know, 26, 27 at this point. And I have my job as well, so I'm able to I have no bills. I'm able to save all this money. And it was, I. Afforded me the option 2016 rolls around, afforded me the option to actually go travel the world for a year.
And during that year abroad, I met my gorgeous wife. I met the company that brought me here to Columbus moved here on a whim. I had never even stepped foot in the state of Ohio and was like, after a year of travel, why not? Why not? And that was eight years ago and I can't even believe it.
It's been this long. The real estate community here is incredible from day one. I moved here for a job, but for day one I was going to real estate meetups. I was meeting just anyone and everyone who had talked to me about real estate. And I was building my courage to actually turn real estate into a career because up to this point I had just thought of it as a hobby.
I thought of it as some side income. I didn't really understand. This was like a life choice. Yeah. Something that would just be good for your retirement and oh, I'll just hold onto these two and it'll just add to it. Correct. Correct. So I was doing all this education. I was meeting tons of people who were investors and they were just normal people.
I thought to be a real estate investor. You had to, have a Ferrari and wear a suit and be snooty and all this, and it just, it was not true. And so through these RIAs and meetups, I was like, okay, cool. This is like maybe a valid option.
Transition to Full-Time Real Estate Investing
And so up to that point I really, I was always working for someone else.
I didn't have the courage, but I finally, I got the courage. 2018, I went to work for myself in real estate. I was a full-time real estate investor. I was wholesaling everything for those first couple years. That's the paid education that I was working on. Do you mean you were wholesaling, like you were buying the homes to wholesale them or you were buying wholesale properties to then flip?
I was making my income by putting a property under contract direct to seller. And then would sell that contract. Okay. So I had the only three I had purchased up through this point were all owner occupant financing. Like I live there, and they're looking at my whole bank account. They're doing all of it.
And so off market, direct to seller was a whole new ball game. And so the first couple years, all I was doing was wholesaling contracts. I was still saving up money. I was buying deals, as you mentioned in the intro, but I was buying them completely the wrong way. I was taking my wholesale income and I was saving up until I would get 20% down on a property and then I would go buy something off the MLS or.
Through another wholesaler, but I wasn't buying my own deals because I didn't know how they were closing in two weeks. I didn't know how my buyers were doing this and how they were funding. I thought they were actually paying their own cash. So I'm like, I don't have enough money for this.
And then so I finally figured out, the 11, I bought the wrong way. Great. Glad I have 'em. I do call them my early mistakes. Yeah, I was gonna say 11 is a good amount. That's a significant amount of money. Yeah. And I'm, I'll say I actually don't own that many anymore. I called them my early mistakes.
Because I just, I had too much equity tied up in them. I was not doing the right repairs. I wasn't doing, I wasn't placing the right residents in there. So it was, just a headache to be perfectly honest. Okay. All right. Yeah.
Mastering the BRRRR Method
Yeah, so they were very 11, very challenging doors and then I finally, it wasn't until January, 2021 through the help of a mentor, I figured out the BRRRR method.
And it, seriously, this is so dramatic. It like fixed every single part of what was broken in my previous process. That's wonderful. I was able to. Purchase with little to none of my own money in the deal or upfront. I was able to do the right renovations when I was buying 20% down. All that renovation money came out of pocket.
No, there was no lender financing on it, so I was skimming, I was saving, I was cutting corners. I wasn't doing the right things. So perfect that, I was able to have a nice asset that people actually wanted to rent. So I was attracting the right renters. I can take it and get it refinanced and assuming you underwrite correctly, you're able to pull all of your investment or your lender's investment back outta the deal.
And you own an asset with none of your own money and you still have 25% equity in that deal. And so can you explain to everybody what the BRRRR method is like? Give a brief overview. Yeah, absolutely. So BRRRR, there's B and four Rs. It's five renovate rent. Refinance, repeat. We're on the purchase. We are looking for properties that are distressed, either condition wise, it's mostly condition and often situation wise.
So the seller may be going through a foreclosure or bankruptcy, divorce, et cetera, and the property, they are willing to let go at a discount to buy those, typically in exchange for that discount. They just wanna be done. They wanna be done with the property. So we're closing fast. And unless you have your own cash, you know here in the Midwest, maybe 75 to 150 K sitting on the sidelines, unless you're cash, which you could really close the next day, we're able to close in really three to seven days using other people's money.
And so that is the key, is that you can close fast in exchange for the discount. And then you have an asset that needs work, so you take it to get it renovated. I do the same renovation over and over and over and over. I was reading that on your site. Yeah. That you do the same thing in every single property.
Every single property. I am not reinventing the wheel. Some will. One's on a slab, one's on a basement, one has a sunroom garage. There's subtleties, but there it is identical. If you look in my portfolio, they all look the exact same. And that's on purpose. It makes management much easier than what paint color did we use here and what floor did we use here?
It's it's all the same.
Scaling and Managing Real Estate Investments
And so in all these properties that you own, they all have renters in them. And so now you have become, it's not fix and flip, it's buy fix up and rent. Fixing that and then you have it for the long term. Yeah. Yep. So we're looking at minimum 10 year holds on anything I buy.
If I can keep it going longer than that, it's just keeps getting better. But that's what we underwrite is minimum 10 years. And can I ask another question? And I know this might be getting too far into the weeds too soon, but do you put each one like in an LLC or separate it out. We don't, no.
Okay. No, that would be a logistical nightmare. That's what I would think, too. Bank accounts, we don't, we do, of course, have quite a few entities and they are split out, but it's not on a per property basis. Okay. All right. Sorry. Yeah. It's not, no, you're fine. Not to take this in a different direction, but that's, no, you're where my mind is going.
No, you're goods. Where my mind is going is logistics. We're doing the same renovation over and over. I know. I know. I'm buying in a lot of the same. Zip codes even more narrow than that. We have probably a dozen that there's two houses on literally the same street. Oh, I'm sure. Yeah. You're doing the same street neighborhood.
'cause it could become so much easier just to get to know so much. Yeah. One zip code and just certain neighborhoods. Yeah. And watch them. So we're like pretty targeted into the locations that I buy and so I know what it's going to rent for. I know the, quality of renter that we're going to attract.
I, I just know all of this stuff going in and that's. What makes it scalable? Because if you're trying to figure this out for every new deal, there's no way you're gonna just spend all of your time in a research phase. Whereas I can look at a deal, and I'm not kidding you, within five minutes or less to have a firm offer on it.
That's amazing. Yeah. And so we get it renovated, same renovation every time. Take it out to the open rental market. I know what it's gonna rent for. Like I said we list it on Zillow. Get applications through Zillow. We do our showings, we do our background credit, all that, all those checks. So you obviously have a team.
I, yeah. When I'm saying we, it's literally me and one fulltime employee. Really? Okay. Yeah. It's super lean. That's by design. She has a lot of autonomy and authority. We, as you mentioned in the intro, we all work remote. I'm in my home basement. She works at her home, like we don't have an office.
It's incredibly lame. That's by design. Yeah, boring is usually profit profitable. It's when it gets like too fancy. I find that it's not profitable, but boring works. Boring works. Boring. I'm telling you, if you wanna have fun, do it in your personal home. And I tell people this all the time, do not have fun on your investment properties.
And like it should be. It's a widget and we're always aiming for clean, safe housing. I don't treat our residents like a widget by any means, but I do treat the houses and the, renovations like Yeah. 'cause they're not gonna, they're not gonna treat the house the way that you would, and so you just don't know what you're gonna.
Walk into, I don't know. And I think that if you have a lot of fun with it, then you're worried about something happening to it, right? Totally. Yeah, totally. Go have fun on your Airbnbs, go have fun on your personal home. Have fun, but just not on your long-term rentals. Okay. All right. That makes sense.
Makes sense. Get it rented out, do our checks, all that.
Refinancing and Maximizing Returns
And then once it's rented, we have the option, and it's part of my method, but you don't necessarily have to, is you get it refinanced and. The refi, we, we can do an example with numbers, but typically they're going to give you 75% of the new appraised value.
And through the renovation, through the market rate resident in place, you know that market rate lease you have now forced the value of that property more than how much you have into it. So I've forced the value, the bank will gimme 75% of that new value. And the idea is if you bur correctly that. The 75% new refi loan, that amount will cover your hard or private money lender that you used to buy it.
If you had any down payment, if you had any holding costs. It covers your renovation. It covers all of what we say. Your all in costs. And The payment on this new loan would be covered by the rent. Yes. And that's probably a key part of it. Yeah. Yeah.
Understanding the BRRRR Method
So when you're underwriting a BRRRR deal, it needs to qualify in actually two different ways.
It needs to qualify. Like numerically on the BRRRR cycle itself. So from purchase, renovation, rehab sorry, refi all, and then it also has to qualify on your monthly cash flow. So there's some, I look at a lot of deals where it's great on the bur side, but it doesn't cash flow or the cash flow is great, but I'm leaving way too much money in the deal.
So it, it's a little bit trickier, like you do need to underwrite in two different ways, but as long as it meets those. Then, so you're underwriting it from the standpoint of just fixing it up, right? With the hard money loan that you're taking? Or you said hard money loan, is that what you're taking at first and then you're underwriting it as remodeled and what you can get for rent and what it would be refinanced for.
Okay. Yep. Correct.
Underwriting and Financing Strategies
So when you're underwriting, if you are doing super high level numbers, you pretty much need the purchase price. The loan to value is how much your lender will give you on the new value. Typically 75, sometimes 80%. You need the renovation number and you need the after repair value. So if you have those four things and one of them is always the same, so if you have those three things, then you can get pretty dang close on what.
Your numbers will pan out too. And are you buying houses that are typically just the same size also so that your renovation cost is the same? That's part of the secret sauce. Yeah. Yeah.
Choosing the Right Properties
So we call it like congruent neighborhoods. That is something that I swear by. If you look at satellite view or street view and all the houses are the same distance apart, they're the same size, they're the same.
I really like a good. Kind of block system where all the streets are, on a grid. And if you're looking in those neighborhoods, it's going to be very easy to determine what it will be worth once it's fixed up, because you're going to have comparable sales if you are buying somewhere that is.
I dunno yeah, in the middle of nowhere or it's on a lake or there's just special circumstances with the house. Yeah. I grew up in Austin, like I said, and there's neighborhoods that are so quirky where every single house is different and it's that's gonna be really hard to figure out what your comparable sales will be.
And you, that's your after repair value. You have to know that number. Before you buy it or you could get yourself in trouble. Yeah, that makes sense. Okay.
Remote Investing and Management
And so the with, can we back up to just even buying it in the first place? So how do you teach people how to, so you guys, she has a mastermind and mini course and things that you can take.
And so do you teach people, the lenders that they can go to get qualified? Is that how you get set up with all of this? Yes. So what we would help a student with as far as financing is connections with exact hard money lenders that I use. We have people nationwide. If you are investing in Ohio, which we have students.
Mainly on tons of West Coast investing in the Midwest. And so if you don't even live here, but you wanna invest here, we can connect you with some of our local lenders that just the level of service and terms, it's like, it's really hard to beat. So That's interesting. So do people move there for a certain amount of time to do this or they're, they don't live there and they can still do this?
They're investing remote. Wow. Yeah. And they don't have to manage the remodel? No. Oh, gosh, that's amazing. If so, if y'all are out there listening, you're like, I wanna invest, but I don't know where. If you come to central Ohio, your numbers are gonna look great and I will connect you with our, my, like my gc, the one I used personally.
They've done our last like 45 projects and they're fantastic. They actually bankroll your entire project, so you just have one payment at the end. That sounds wonderful. Yeah. Rather than, I need $5,000, I need 10, I need 30, or whatever it is. Yeah. Okay. Alright, this sounds really interesting.
Mastermind and Mini Course Overview
And then can you tell us a little bit about your mastermind? 'cause I wanna make sure that we spend some time on that too. Can you tell us about what you teach people in your mastermind and how long it lasts and all that? Yeah. So it is a six month program and it is designed to get you through an entire bur cycle.
We start with, we call bootcamp, and it's called Rentals Made Easy. I should say that. Rentals made easy. We start with bootcamp where we're getting you connected with all these lenders we talked about. We're also helping you raise private money. That would be your own friends and family, your personal network, but we give you all the tools to go out and do that.
Your entity set up in creation, bank accounts, EIN, like your tax relationships, all of that. We get you deal sources coming in the door, so agents and the the different feeds you need to be on. I'm sure you set up those constantly. And then like actually working with wholesalers, that's a big one.
So there's a whole world of off market deals that Oh, it's huge. It's huge. Yeah. And the deals are frankly better. So yeah, you gotta learn to work with wholesalers if you want to find the by distress, if you're just looking. Yeah. Because once it hits the MLS, it's, yeah, it's over. If you're just looking for something turnkey, then MLS is probably your best bet.
But if you want the BRRRR method and you want something under market value, then you almost are required to learn wholesaling. Not wholesaling. Learn to work with wholesalers. Okay. This sounds super, so you get people like really set up. They're ready to go. Oh, totally Set up. That's wonderful.
Okay. Yeah. And then how would this go with different market cycles? So could 'cause you've been through a lot, you've been through a down market. Different in a down market than in an up market or even like how it is now because Austin is going down. And so there's different markets across the country.
Yes.
Creative Financing Strategies
So I think you just need to get a little bit more creative with your funding strategies. So we actually, yesterday I had a group call that was all about creative finance and different strategies that, maybe hard money or private money at 12% isn't going to work, but the seller. They're three years into that, four years into that COVID mortgage rate.
And maybe they wanna sell subject to, or they're willing to be the bank. So we do talk about some of those like more creative finance strategies as well. Okay. And so the cycles, right? And you guys, seller financing is when somebody basically has a house that's paid off, or the subject to is they have a mortgage and you're able to take it over.
Which that would be a whole another conversation. That's a, that's totally going into some deep diving, some things. And so you're saying that as the markets are changing, then you just have to get more creative with the way that. That you're financing? A hundred percent. Okay. And more creative not only on the purchase, but also on the exit.
Sometimes long-term rentals, which is my bread and butter, sometimes that isn't the answer. Sometimes the neighborhood can warrant a midterm rental or even a short-term rental, and you can increase your income, which can help offset, the higher rates that we're seeing in higher purchase price.
Although we are as of. Last couple months seeing sellers back off those COVID expectations. The, I think we all know by now that the economy's a little, so it's not what it used to be. Yeah. And there's just a lot of uncertainty right now. And there's I had a show too about, and I got certified in Assumable loans, and I think that's actually a really great thing for investors also.
Would you be able to do this with an consumable loan like you would assume it at first? And then refinance it or would you keep it the whole time? So it depends on the condition of the property, because if you're doing a $50,000 rehab, no one is financing that with an Assumable loan, right? So you would just have your 50 K stuck in the deal and until you refinance one day.
We have offered sellers and done plenty of deals where it was sub to their existing loan for 12 months. Hey we're gonna take it over right now, but we're gonna have it paid off within 12 months. Okay. And then that's on, and that's when you refin, the renovation outta pocket.
Okay. But knowing I'm gonna refinance right away. Okay. But you're saying with your typical BRRRR method that you are using other people's money you're using hard money lending to per, not only purchase the property, but also pay for the renovations. Hundred percent renovations. That's amazing because I think that's where it gets really sticky is, hey, okay, I can finance this house, but then, you know what, if you wanna put in $80,000 for a renovation?
So yeah, it ties up a lot of cash and that's where I, my early mistakes, that's where I was seriously, I was skimping on everything because it was going to be locked up that any money I put into the house was locked up in the house. I didn't really understand yet that you could refinance and pull that money out.
That's really interesting. This sounds great. It sounds like you've been doing it for a really long time. You know what you're doing, and the reviews on your website are really great for your mastermind. Oh, thank that. People were getting up and going, and the fact that you've purchased so many properties in the last three years, that's a testament, that's a lot of properties.
It is been a wild ride in a good way. Yeah. I would say, there was some learning curves and bumps in the road of course, but it's pretty dang systematized at this point. Yeah, it sounds like it. Since you were saying if you just have these, what was it, four different numbers?
The purchase price, the renovation costs, the rental, the loan to value. Okay. Yeah. And that one's always the same. So it's really purchase price after repair, value and construction cost. Okay. And if you have those, then you're able to figure it out within five minutes. I mean with practice? Yes. Yeah. Yeah, with practice it was knowing your markets.
If you're bopping all around the country, look at your, no, that's gonna probably take you an hour per deal. But if Hey, I own a property three blocks away and it rents for this, like you already know the market, it really helps. Yeah. You know the market and what's happening in it. Okay.
Upcoming Projects and Book Launch
And so what is, and then I is there anything you have that you're excited about upcoming real estate or business projects that you're excited about? Yes. We actually just launched, can I tell 'em about the book? Yeah, I was gonna say 'cause your rental's made easy book is in the background. If you guys aren't watching this on YouTube.
Everything that we have talked about today and from the bur cycle and ongoing management, because we manage everything in house, I swear by it. I believe everyone should manage their portfolios. We go over all of that in my book. Rental's Made Easy, it's the program. Obviously you don't work with me, but it's the program content itself.
So it's available on Amazon. We are on ebook, so if you're a Kindle reader, like I am or we have the paperback as well. Okay. And I'll have all of that in the show notes. You guys, I'm gonna have her website. I'm gonna have a link to your mastermind. Even your, I think, your free mini course too.
You've got a lot of stuff on your website, like you're ready to go. Yeah. It's been fun building this. Honestly, what, it's so funny. When I started coaching, I was like, oh, I'll just hop on and teach some people about real estate, and that is not the case, but like in a good way.
It's been a journey to build it all. Yeah. And I was tell, I was telling you before we even got started, you guys, like I, I was telling her about, I, I get, I'm not kidding. 10 emails a day about people pitching to be on my podcast. And I rarely even reply and I answered yours because you were just a real person.
And most of the time when people are pitching real estate investing, it's like I was a TEDx talk and I've been on this and it's so big that it's like I just want a normal person that just can teach normal people how to do things. Exactly. That's what I'm all about. And that's how you come across and that's how your website is.
And even, the pictures that you have. And so I just, yeah. I it. So if you, listeners, if you like me, then I think you're probably gonna like Jesse too. I appreciate. Not that we know each other personally, but just from talking and our website and, just the minimal amount of contact that we've had, I really think that this is just.
Easily digestible and implemented and all of that. So kudos to you for that. Thank you. Yeah, I'm glad that's obvious because that is exactly what we stand for. Yeah, I didn't set out to become a real estate investor. It took me probably 10 years to even figure out it was a choice and then.
Once I figured it out, we had bumps in the road along the way, but I've, I keep standing, so I appreciate that. Yeah. Oh, that's wonderful.
Conclusion and Contact Information
Well, you guys, Jesse's website is called unlockedrentals.com, and that's where you can find her book Rentals Made Easy. But again, in the show notes, I'm gonna have all of this.
Linked and you can reach out to her if you wanna do her mastermind or her mini course or buy the book. And thank you so much for being on. Yeah, I really appreciated the nuggets of wisdom that you have, and I think if anybody's interested in doing this, you would be a great resource for it. So thanks.
Thank you so much. I appreciate Janet. Yeah. Have a great day, you guys. Thank you so much for listening. I appreciate all the feedback that you have about the podcast. I hope you learned something today and I will see you next week. Thank you for listening to the Unconventional Investor Podcast. I hope you feel more confident in how you can grow your wealth using the strategies I shared in this episode.
If you're ready to take the next step in diversifying your portfolio outside the stock market with alternative investments, head to me financial.net/contact us to book a 15 minute consult call with me. Let's discuss how we can work together to achieve your financial goals. Until then, I'll see you on the next episode.
Disclaimer: The information provided in this podcast is for general informational purposes only and should not be construed as professional financial advice. Always consult with a qualified financial advisor or professional before making any financial decisions. The hosts and guests of this podcast are not responsible for any actions taken based on the information presented.