The "BRRRR Method" in real estate investing stands for Buy, Rehab, Rent, Refinance, and Repeat. It is a strategy that involves purchasing a property, renovating it to increase its value, renting it out to generate cash flow, refinancing to pull out the invested capital, and then repeating the process with the newly acquired funds.
Here are the steps involved in the BRRRR Method:
1. Buy: Find a property that is undervalued or in need of repairs. This could be through traditional methods like working with a real estate agent or through off-market strategies like networking or direct mail campaigns.
2. Rehab: Once you have acquired the property, renovate it to increase its value. This could involve cosmetic updates, repairs, or even major renovations depending on the condition of the property.
3. Rent: Once the property is renovated, find tenants and start generating rental income. It is important to screen tenants thoroughly to ensure reliable cash flow and minimize potential issues.
4. Refinance: After the property is rented and has increased in value, refinance the property to pull out the invested capital. This involves working with a lender to get a new loan based on the appraised value of the property.
5. Repeat: With the capital you have pulled out from the refinancing, repeat the process by finding another property to buy, rehab, rent, and refinance. This allows you to continue growing your real estate portfolio and increase your cash flow over time.
Author
Larry L. Gilmore
President & CEO
ClearBlu Capital Group