If you feel like you’re being left in the cold regarding real estate investing, you might want to look into the BRRRR investing method to get off the bench and in the game. With a hard money loan, determination, and knowledge, BRRRR investing has helped many beginning investors start and establish a lucrative career in real estate.
What Does BRRRR Stand For?
BRRRR is an acronym for:
- Buy
- Rehab
- Rent
- Refinance
- Repeat
To help you better understand this method of real estate investing, we’ll walk you through a hypothetical BRRRR investing example..
A Deeper Look Into BRRRR Investing
BRRRR investing is so popular because it has specific, repeatable steps that any investor can master with some practice. You just have to know what to look for every step of the way, so let’s walk through this BRRRR method example.
Buying
The idea behind BRRRR investing is to add value to a home so you can refinance against the added value delivered by the “Remodel” step. With that in mind, when you buy a house for BRRRR investing, you are not looking for a turnkey family home or slick bachelor pad. You want to buy low – and ugly.
You’re looking for ugly kitchens, bathrooms with avocado-green sinks from the sixties, and shag carpets that make you cringe to think how much dirt has built up in them over the years.
Ways to find ideal homes for BRRRR method investing include the following:
- Look for homes being sold “as-is” or “by owner” on the market
- Network with reputable wholesalers. Wholesalers use their hustle to find distressed properties and secure contracts for low purchase prices, then sell the contracts to investors like you so you can benefit from the low sales price.
- Network with real estate agents who are often sitting on off-market deals or potential sales that they’d be happy to close without having to put on the market.
If you want to talk about more BRRRR method examples, give our office a call, and we can likely put you in touch with another client who might inspire you.
Most people finance their purchases through a short-term hard money loan from lenders who understand the BRRRR method. These are short-term loans meant to fund your initial expenses and are refinanced in a later step.
Rehab/Remodel
Once you’ve purchased the house, warts and all, it’s time to live out your own HGTV moment. To ensure you receive as much return on investment as possible, you want to work with contractors who understand BRRRR investing and have BRRRR method examples and testimonials from other clients.
This is crucial for a few reasons:
- They’ll be more likely to get the job done quickly, which is essential so you can refinance faster.
- They’ll know what materials to use to keep costs down while delivering quality service.
- If they have a track record, they’re more likely to stick to their timelines, quotes, etc.
It’s not a terrible idea to have a contractor walk the property when you’re going through the Buy step of BRRRR investing. You’ll get an idea of what they think needs to be done and whether you’re on the
same page.
Rent
Once the avocado-green bathroom is transformed into a modern haven and the cringe-worthy carpet is replaced with water-resistant laminate wood floors, it’s time to find tenants. The right tenants are key for any BRRRR method example scenario for a few reasons: they pay your mortgage and hopefully produce cash flow. That’s why you’re looking for BRRRR method examples and getting ready to take action in the first place, correct?
Refinance
Once your tenants are in place, you can refinance for a long-term rental loan. At HouseMax, we offer financing solutions for all of your BRRRR investing needs, which allows us to build relationships with investors
like you.
Repeat
If you’re like most investors from BRRRR method examples, once you go through the process once, you’re hooked. BRRRR investing is a great way to build multiple income streams and benefit from all that real estate has to offer.
Getting Started With BRRRR Investing
The main reason would-be investors stay on the sidelines in real estate investing is they’re not sure how to finance their projects. You can potentially be funded within 10 days by speaking with a hard money lender. At HouseMax, we love helping beginning investors start their real estate journey, so give us a call to learn more about funding your BRRRR investment.
Contact us here or call us at 206-569-1132.
