Smart investors know that if you want to rapidly expand your portfolio, you'll have to use leverage! I've watched investors go from one rental property to a robust portfolio in a short few years by utilizing a strategy known as the BRRRR Method.
Let's say, for example, your Freedom Number is 14. If your plan is to save cash and purchase properties one-by-one, it could take a while. Unless you happen to have a huge savings account or another means to cash, the BRRRR Method might be your ticket to financial freedom!
Here's how to use this strategy:
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!
That's it! I've watched many investors successfully pull off this strategy, and I know you can too. If you're ready to get started on your journey to financial freedom, we'd love to help! Click here to book a free, no obligation call with our team.