Just a few years ago, the birth strategy was like magic.

Buy and fix up a property, refinance, pull out all of your money, and then repeat. But today with higher interest rates, that formula doesn't work the same. So is the birth strategy dead, or are there smarter ways to adjust and still make it work in today's market? That's what I'm going to show you in this episode. Hey, if we haven't met yet, my name is Chad Carson. You can also call me Coach Carson. and on this channel, I teach you how to use real estate investing to achieve financial freedom

so you can spend your time. Hey, if we haven't met yet, my name is Chad Carson. You can also call me Coach Carson. And on this

channel, I teach you how to use real estate investing to achieve financial freedom so you can spend your time doing more of what matters. So I'm going to jump into an example with real numbers. But before I show you what things look like today, I want to go back to the good old days, back when interest rates were 4.5% and show you what a real deal would have looked like, at least for me and my market.

So let's say I was buying a single family house,

three bedroom, two-bath,

be a typical kind of B-plus neighborhood rental for me. And a good deal for me would be buying

it at about $175,000. Maybe I had to put rehab into it, remodel it, fix it up, put let's say

$50,000 in remodel costs plus other holding and closing costs.

But the main point is my total cost in this deal would be $225,000 all in.

And the ARV or the after repair value would have been about $300,000.

So it's about 75% of the total value is what my cost in the property is. Now the question is, how would I have bought this property? How would I get the money to buy it? So even if I didn't have my own money, what it might have done is used a home equity line of credit, like a line of credit from another property. Maybe I would have used a private money lender. That's how I grew a lot of my business. Or eventually I had my own cash as well. But maybe I didn't want to leave all my cash in the deal, but I used it short term to buy the property, fix it up. But somehow, some way, I have to have $225,000 in cash to buy it and do all that. But then the point of the Burr strategy is then maybe I get it rented. I get it stabilized three months later, six months later, maybe a little bit longer.

I refinance it, I get it stabilized, three months later, six months later,

maybe a little bit longer. I refinance it and I use a long-term fixed mortgage. And so you use

like a 30-year fixed mortgage, like a conventional loan or maybe what's called a DSCR loan,

debt service coverage ratio. Both of those are really good options for investors. And I do a lot of

videos and other content on that. But let's just say in this example, because this trade is really

low, I could get a four and a half percent 30 year loan. And I borrow 100 percent of my cost in the

property. And the reason I'm able to do that. And here's the whole key of the borrower strategy back

then was you had to be,

have all your costs be below about 75% of the full value. In some cases, maybe that 70%.

It depends on the loan program. But you're almost always trying, this is the limitation,

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