BRRR is an acronym that stands for ‘Buy, Refurbish, Refinance and Rent’. It is a strategy used by real estate investors (including myself!) to purchase a distressed property and renovate it to increase its value, refinance the loan and pull out cash, and then rent the property out to tenants.
This strategy can be a great way to generate passive income and build long-term wealth.
The goal of the BRRR strategy is to purchase a property at a discounted price, increase its value through renovations, and ultimately refinance the loan for a higher amount to pull out cash.
In this blog, I will be guiding you through each step of BRRR individually.
Step One: Buy!
The first step of the BRRR strategy is to buy a distressed property. This can be a foreclosure, a fixer-upper, or a property that needs some minor repairs.
By purchasing a distressed property, you can get it at a discounted price and can then add value to it through renovations.
Step Two: Refurbish!
The next thing you’re going to need to do is to refurbish the property.
This means making repairs, upgrading fixtures, and maybe even adding a bonus room or two. By adding value to the property, you can increase its worth and make it more appealing to tenants.
Many more people will be interested in a higher quality property, so don’t overlook this part!
Step Three: Refinance!
The third step is to refinance the loan for a higher amount.
This is accomplished by finding a lender who will offer you a new loan for a higher amount than what you originally borrowed.
Doing this allows you to pull out cash from the loan, which can be used to reinvest in other properties.
Step Four: Rent!
Finally, the fourth step is to rent the property out to tenants. By renting out the property, you can generate a steady stream of passive income. This income can be used to pay off the loan, cover renovation costs, and potentially provide a profit.
The BRRR strategy can be a great way to generate passive income, build wealth, and increase your real estate portfolio. If you’re looking for an effective way to invest in real estate, the BRRR strategy may be the right choice for you!
Click here if you’d like me to help you get started!