BRRRR Calculator + Examples To Learn How To Do The BRRRR Method

The overall idea with the BRRRR method is that an investor would be able to recoup their initial investment (i.e., down payment, rehab expenses) and put it towards another property.

This strategy is what I strive to accomplish every time I look for a potential investment property. Honestly, I call my first investment an accidental BRRRR.

What Does BRRRR Method Stand For?

BRRRR is an acronym that stands for Buy, Repair, Rent, Refinance, and Repeat (others call it Buy, Rehab, Rent, Refinance, Repeat). Though not all investors may be familiar with the acronym, the BRRRR method is a common strategy among investors.

What Kind Of Properties Are Best For The BRRRR Method? Undervalued or distressed properties are ideal for this strategy. However, the process requires that an investor add value to the property through improvements to increase the property’s market value.

How To Do The BRRRR Method First Step: Buy Rehab Property If you don’t have enough cash to make a full cash offer, there are several ways to still invest with no money. After all, capital is required when purchasing a property. This strategy is accomplished by leveraging other people’s money in the form of a short term loan.

Second Step: Rehab Property In this phase, improvements are made to the property to increase the market value of the property.

Third Step: Rent Property After an investor makes improvements, they can market the property to potential tenants.

Fourth Step: Refinance Property

In this phase, the initial loan will be refinanced into a term loan via a cash-out refinance. You will then use the cash to pay off the first interest-only loan and your out-of-pocket expenses.

Step Five: Repeat This process is how you can use the BRRRR method strategy to scale your real estate portfolio.

Final Thoughts & Recommendations There is a saying among real estate investors that you make your money going in! The BRRRR strategy is a great way to scale your real estate investing strategy.

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