I’ve been in the real estate business for years now, and in that time, I’ve seen many investment strategies come and go. However, the BRRRR Method for real estate investing has been around for a long time, and in my opinion, it’s here to stay. With that said, I thought that “How to Find BRRRR Properties” would be a great topic to touch on. There are multiple ways to find properties that are perfect for incorporating into the BRRRR method, but I’m going to narrow it down to just five strategies that I have personally found to be very effective.
To get the ball rolling, let’s start with a quick answer:
How do you find BRRRR properties? The best way for investors to find BRRRR properties is to seek out off-market real estate. Methods for locating these types of properties would be utilizing a direct mail campaign, partnering with real estate wholesalers, using the driving for dollars strategy, posting bandit signs, and visiting estate sales.
An Overview of the BRRRR Method for Real Estate Investing
Since you are researching how to find BRRRR properties, I’ll assume you are already aware of the ins and outs of the BRRRR Method. But, for those who would like a brush-up, we would like to just go over the basic definition of the BRRRR Method for real estate investing. Each letter stands for a step that is taken: (B = Buy) an investor buys a property, (R = Rehab) repairs/rehabbing are done to increase the property value, (R = Rent) the property is then rented out to a tenant, (R = Refinance) the investor takes a loan out on the property, (R = Repeat) the money from the loan is then used to (Buy) another rental property, which starts the process over again. It all comes together to create a recipe for financial success. Investors who put the BRRRR Method into action a few times will have the experience to just keep moving forward, using the (Refinance) aspect of the strategy to fund the next purchase, instead of using their own money. As you can imagine, this can significantly grow an investor’s buy and hold real estate portfolio in a quick amount of time.
Before diving in to the rest of the article, watch this quick video on the BRRRR Method:
Now, let’s jump into a few strategies for locating properties that work best with the BRRRR Method for real estate investing.
How to Find BRRRR Properties: Seek Out Off-Market Real Estate
In my 15 years working within the industry, I’ve found that the best way to find BRRRR properties is to seek out off-market real estate. As the name suggests, this is real estate that is not listed for sale on the market. It’s typically not advertised, and it’s normally sold by a private owner. Off-market real estate is often sharply discounted because of property issues. Or, the property may be ok, but the owner has personal or financial problems that cause them to want to quickly get the house off of their hands. So how do you find BRRRR properties? We’re going to take a look at five strategies for locating deeply discounted real estate that you can perfectly incorporate into the BRRRR Method:
1. Use the Driving for Dollars Technique
This technique for finding BRRRR properties has been used for years. I’ve used it, my fellow investors have put this strategy to good use, and our portfolios have grown because of it. Some even love going down this path because they enjoy the hands-on experience. In a nutshell, Driving for Dollars is the process of driving through various neighborhoods in search of properties that show signs of neglect or distress. This can include things such as windows that are boarded up, severely overgrown grass, portions of the house covered in tarps, excessive door hangers and newspapers on the porch – basically, anything that looks as if no one is caring for the house, or living in it. These are potential BRRRR properties because there is a very good chance that the owner would like to get rid of the house for one reason or another. Once you locate a potential BRRRR property, there are a few steps you can take to get a hold of the homeowner to let them know you are interested in purchasing their property:
- Place a note on the door that contains your intentions and your contact information. This may seem like a small step that won’t get any results, but in reality, some of these homeowners may jump at the chance to be free and clear of their property that they may feel is a costly burden.
- Knock on the neighbor’s doors to ask if they know how you can get a hold of the property owner. They may actually be happy to give you the information knowing it could result in the house and yard finally being put back into shape.
- Conduct a search at the public recorder’s office to see if you can locate the property owner’s contact information, so you can send them a letter.
- Utilize the Driving for Dollars App, which can give you the property owner’s name and contact information, along with a lot of other helpful details.
A Tip to Consider When Sending a Personal Note Directly to a Property Owner
If you have your eye on a potential BRRRR property, and you have found the owner’s name and address, I have a tip for you that can increase your chances of closing the deal. When you send a letter their way to let them know you are interested in purchasing the property, send a purchase agreement along with the note. There are some property owners who will sign it and send it back the same day, knowing they will be receiving much-needed cash for a property they can’t wait to get rid of. Before moving forward with any deal, you should check the numbers to make sure it’s profitable. You can use this reliable software to run the numbers; it’s called DealCheck. It quickly analyzes the profitability of the property you are considering.
2. Create a Direct Mail Campaign That Targets Motivated Property Sellers
Everything seems to be going digital these days, but some things are too good and effective to change. This includes a good old fashioned direct mail campaign. It can put something real in the hands of a property owner, as opposed to an email they may view as spam. You will also want to ensure that what’s printed on your mailer is a short and sweet, attention-grabbing message. Why? Because you may only have a split second for them to decide to keep looking at your mailer, or place it in the trash. So you will want to make sure the point is in plain sight as soon as they glance at the card. The key is to target a specific group of property owners, as opposed to blindly mailing to random homeowners. The type of owners you will be looking for are ones who have a tax lien on the property and are behind a year or two. Or, owners who have had code violations placed on their property, foreclosures, evictions, and the like. The best way to find properties with tax liens and other issues is to inquire with the county to see if you can get a list of properties with these specifications. You never know; these owners may just love the idea of getting a bundle of cash for their property that has been causing much stress in their life.
3. Post Bandit Signs to Find Below Market Value Buy and Hold Real Estate
When looking into how to find BRRRR properties, you may want to just use this tried and true technique that has been around for decades – placing a sign in a high traffic area where potential property sellers might see them. You have probably seen them yourself, signs that say, “We Buy Houses for Cash”. Imagine someone has inherited a broken-down home when a family member passed away, and they are stuck paying property taxes, and just don’t want to deal with it. Then they see your sign that says, “We Buy Distressed Houses”. There is a good chance they may call. Great areas to post this type of sign would be poles near stop signs or traffic lights, and other areas where vehicles may be stopping. It doesn’t hurt to post a sign, so why not do it? However, if you are one to play it safe, you may want to check with the city to make sure you are not posting in areas that are prohibited.
4. Go to Estate Sales to Seek Out Low-Cost Property Opportunities
This way to find BRRRR properties is often overlooked, but can yield some pretty good results. A lot of times, estate sales are brought about by someone passing away. The family has an estate sale to sell off all the unwanted items in the house that were left behind. Sometimes these houses are not in a sellable condition, and need a bit of work to be able to place them on the market for a reasonable amount. However, some family members just don’t want to deal with it and would welcome someone stopping by to make them an offer. A large sum of cash may seem more desirable to them than doing renovations, repairs, inspections, and the entire selling process. You will also find that estate sales are the product of foreclosures, divorces, and other undesirable events that may take place. You can often find out where estate sales will be held by looking in the classified ads, or on specific estate sale sites.
5. Partner with Real Estate Wholesalers – They Will Find BRRRR Properties for You
If you want to find BRRRR properties, but don’t have the time to do all that’s involved in searching for them, you can simply work with a real estate wholesaler. Their main objective is to find off-market properties for investors. The process goes something like this – the wholesaler does the legwork to find a low-cost, off-market property. They then proceed to locate the property owner, and when found, present the idea of selling the home. If the property owner is on board with this, the owner and the wholesaler place the property under contract for a certain amount of money. Then, the real estate wholesaler finds an investor that will pay a higher amount than the contract was drafted up for, and the wholesaler keeps the difference as a profit. You can find experienced and reliable real estate wholesalers by asking around – other investors or contractors who have been in the business awhile might be able to refer a few people. Or, go to real estate meetup groups to find qualified wholesalers. Try the Real Estate Investment Association (REIA), they offer outstanding opportunities to meet with other industry professionals. Meetup.com will have local REIA meeting listings. If you’re interested in learning more about wholesaling in general, we recommend looking into a wholesaling course. You can view information on this topic on the Morris Invest Wholesaling Coaching Program page.
Helpful Morris Invest Articles for Investors Using the BRRRR Method
- Learn how to buy rental properties with multiple investors.
- Find out what tools and resources real estate investors are using.
- Dive into this tax article to learn how to keep more money in your pocket.
- Read about why the 1% rule can save property investors thousands.
- Learn why hiring a property manager is a smart financial move.
- Read our article on the top 5 real estate podcasts for investors.
It’s worth mentioning that if you plan on investing in rental properties, you can benefit from looking into this software that can streamline the entire tenant process. It’s called the Landlord Studio. We have used it, and so have many of our clients. It’s helped tremendously. Check out the Landlord Studio website to see if it’s something that might make your life easier. Additionally, the BRRRR Method provides the funds to buy other properties, but what if you’re buying your first rental property? If that’s the case, and you’re looking into ways to fund a deal, you might want to check out our Fund & Grow page. Fund & Grow has helped thousands of our clients secure the funds to make their dream of buying a rental property come true. They help you find introductory offer, 0% interest credit cards, and then you fund the deal with that money, at 0% interest. Also, if you’re looking for additional ways to raise money to buy that first rental property, we suggest taking a look at our favorite wealth-building site – www.justbuildwealth.com.
Use These Techniques to Find BRRRR Properties and Start Growing Your Portfolio!
I hope this article has given you some insight as to how to find BRRRR properties. You might want to try a few of the recommended techniques to see which one is right for you. Additionally, if your goal is to invest in real estate to become financially free, take a look at this page we created to feature our Freedom Cheat Sheet. It will provide you with guidance on how to meet your financial goals through real estate investing. If you have any questions on how to find BRRRR properties, feel free to schedule a complimentary call. For those of you who are looking for a great state to invest in rental properties, Texas is it! It has low-cost housing that’s perfect for the BRRRR method.
Take a moment to watch this video that talks about why Texas real estate is so inexpensive:
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