The BRRRR Method is an effective strategy used in real estate for exponentially growing your real estate portfolio. This strategy is a powerful and proven way to leverage. If done correctly, the BRRRR Method can help you quickly grow your real estate business in a matter of a few short years.
If you’ve ever wondered how successful investors turn one rental property into a robust portfolio, this is it! In the last few years, the BRRRR Method has become extremely popular, and I see our investors employ this strategy on a regular basis.
Here’s how to do it:
Buy - You don’t want to just purchase any house. Don’t simply call up a realtor, and pay over market value for a house plus closing costs. You want to find a property below market value, so that you can add value in repairs. The purchase is very important in this process—buy low!
Repair - Repairing can be tricky, because you don’t want to spend more than necessary, but you still want to create a solid home for your tenant. It’s a balance. Don’t over-upgrade the property. You don’t want to take too long either, because then you aren’t making money from rent checks. Check out my video on how to renovate a rental property.
Rent – Get a tenant in there, so the property begins to produce cash flow. If you’re working with a professional property management team, they’ll take care of this step for you.
Refinance – I suggest approaching a local bank. They’re way easier to work with than big banks on refinances. Local banks tend to have great introductory rates for refinances. Sit down with a banker, talk about the property, and let them know what your goals are. They’ll be able to match you with a great product that meets your needs. You should expect to receive 75-80% of the value of the home.
Repeat – Once you’ve pulled the money back, out purchase your second and third rental properties! Rinse and repeat!
Have you used the BRRRR Method on your journey to financial freedom? Come leave a comment on our YouTube video on the BRRRR Method. We’d love to hear your thoughts!