The Buying, Rehab, Rent, Refinance and Repeat (BRRRR) Investment Strategy
A summary of how effective the BRRRR (buying, rehab, rent, refinance, and repeat) strategy is when it comes to real estate investing.
House hacking, fix and flip, wholesaling; all these are investment strategies that you can use to be able to start off in your real estate venture but perhaps the one that is my favorite is the BRRRR strategy.
BRRRR stands for buying, rehab, rent, refinance and repeat. The reason why this one stands out is that it combines the benefits of both house hacking and house flipping as you will come to see.
First of all, you begin by buying a property, for example, a three-bedroom house that is undervalued maybe because of the condition it is in, and as soon as you purchase it you rehab.
Rehabbing that particular property means fixing and revamping it, making it look better and attractive. This essentially is what will attract the buyer who may want to rent it.
You then rent it out and from here your tenant starts giving you monthly rent that may serve as your source of income and after about six months or so you may then decide to refinance it.
Refinancing it with a bank means that you pull out money or you place debt on that particular house by taking out a mortgage on that house and it is at this point that the BRRRR strategy becomes the most powerful real estate investment strategy.
The moment the bank gives you the mortgage you may then decide to use that mortgage to buy another undervalued property and begin the process all over again and this is where the repeat aspect comes in.
Of course, before venturing into this, the financial aspect of it must be thought out and planned meticulously. With good planning and hard work, you may be able to build wealth by investing in real estate using the BRRRR strategy.