How Does the BRRRR Strategy Work?

You need a strategy — especially if you’re just starting out as an investor. The BRRRR Method is just that: a specific, tested, and sustainable investment strategy that can get you from point A to point B and beyond.

BRRRR stands for “Buy, Repair, Rent, Refinance, and Repeat.” This real estate investing method describes a strategy and framework used by investors who have the desire to build passive income streams over time through collecting rents from tenants and building equity in properties.

How Does the BRRRR Strategy Work?

Looking for undervalued properties becomes an essential step for any wise investment, but it remains especially important when it comes to the BRRRR method. 

1. Buy

Once you’ve bought your property, you’ll have a good idea of how much you can afford to spend on repairs, as well as what specific repairs you’ll need.

2. Renovate

Renting out the property is your endgame for the property, so that means in your initial buying process, you should evaluate the property as a rental.

3. Rent

Cash-out refinances can free up some cash, but they also have a lot of other advantages as well. You’ll get a much better interest rate on a cash-out refinance than you would on a home equity loan or a home equity line of credit (HELOC), much less another hard money loan. 

4. Refinance

The cash from the previous step would make a perfect down payment on another property. And this time, you’ll have experience under your belt, a growing network of contractors and a cash-generating rental property.

5. Repeat

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