"My brother is not bad."
Translation:मेरा भाई बुरा नहीं है।
नहीं should always be placed adjacent to a verb. बुरा is an adjective so the only verb in this sentence is है which is why नहीं should be placed right before है.
It can also be to the right of verbs (except auxiliary verbs like है, रहा etc). Placing it to the right of the verb emphasises the negation. Eg: मैं सो नहीं रहा - I am NOT sleeping.