The primary difference between the BRRRR (Buy, Rehabilitate, Rent, Refinance, Repeat) technique and a typical rental property investment approach is investing in distressed properties and refinancing the acquired real estate to buy another.
The first step in the BRRR strategy begins with you purchasing the property. It may sound simple, but it’s usually one of the most challenging steps, especially for first-time investors. The reality is you want this property to rent quickly. It means your BRRR property has to be in a nice neighborhood. It has to be in the middle of everything a renter will want, like good shopping options or good schools. Look for a place with a high walkability score as more people get into low-impact exercising.
You want the renter to live in the property as long as possible. In essence, you have to pick a property that you’ve researched well and one that you’d want to stay in. Also, the property has to be within your price range. You have to keep in mind many things as you consider the BRRR investment strategy.
The first of the R’s stands for the rehabilitation phase of the BRRRR real estate property. As mentioned earlier, people need to research the property they’re thinking of buying. The research should include rehab costs as these costs can wallop you.
You have to be thoughtful about the rehabilitation process. It can’t be extensive or too peculiar. Ensure you get what you want from your investment while retaining your profit margin.
The following R is renting. It is a big reason people consider the BRRRR real estate method. This part wouldn’t be so hard if you completed the rehab updates that allow you to rent your property at a market rate.
The Refinance process is the next big step in the BRRRR method. Here’s where you can begin to feel the benefits of all your hard work. Sure, seeing money coming in from your first rental property is excellent, but that’s not the ultimate goal of the BRRRR investing method.