I want to share with you one of my favorite strategies for acquiring rental properties. Some have called it the BRRRR Strategy. That term wasn't even around when I first used this in my business.
Here is the BRRRR Strategy Step-by-Step:
- Buy a rental property for cash
- Rehab the property and get it ready for a tenant
- Rent the property to a qualified tenant
- Refinance the property and pull out the cash you invested
- Repeat the entire process again to build a rental property empire
I have detailed many times the benefits of owning rental properties as well as passive income to help you quit your job. Recycling my money over and over again to build my rental property business so I could quit my job.
Listen to the Podcast Episode on the BRRRR Strategy for Investing In Real Estate
In 2006, I bought my very first rental property and next four properties with this strategy. Here is one property I bought using the BRRRR method on my property in Houston.
It is a very simple process but does take knowledge and skill in order to implement it well. Learning how to invest in real estate is simple but there are many steps.
Are you ready for the B.R.R.R.R. strategy?
Article Table of Contents
BRRRR Strategy = Buy, Rehab, Rent, Refinance, Repeat.
The Benefits Using the BRRRR Strategy
- You can buy properties cheaper if you’re paying cash. I have bought properties that needed work done on them and a conventional mortgage would not have approved because the repairs were to extensive.
- When you buy a rental property with conventional financing, you need to put 20% of the purchase price down to buy the property. For a $100,000 property, you would have to spend $20,000 to get the mortgage on the property.
- You can potentially have none of your own money in the property and receive cash flow every single month.
- You can repeat this process until you get 10 properties which is the max amount of mortgages you can have in one person’s name.
- Start all over again by acquiring properties in your spouses' name or a partner.
- Increase your passive income dramatically over a very short period of time.
BRRRR Calculator
You can use this BRRRR Calculator to find out how much your mortgage payment will be after you do the BRRRR method for investing.
To use the BRRRR Calculator, make sure you account for borrowing 75% of the ARV as your total dollar to be borrowed for the loan.
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