The BRRRR Strategy – Buy, Renovate, Rent it, Refinance and Repeat.
December 28, 2020
The BRRRR strategy is a question that comes up with investors all the time. It stands for Buy, Renovate, Rent it, Refinance and Repeat.
It’s a strategy that many investors use to take advantage of a property in disrepair or quite dated and could use a fresh renovation and has potential for multiple unit rentals. Once the renovation work is completed and units rented out, the value of the property should increase and an opportunity to refinance would allow the buyer to recover capital used to improve the property and the process can start again with another property.
The key to this strategy is having the capital to purchase and to complete the necessary improvements. It’s capital intensive and your initial mortgage when purchasing would need to be short term (1 year) because it will be refinanced. The financing could be more costly because the initial purchased home is not as desirable to lenders. A great strategy that requires a sound plan, a solid budget and realistic rental income projections. Especially, in the current environment I would provide guidance and consultation with all this.
If you have any other questions, please drop me a note. Stay well and more importantly, stay safe.