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BRRRR Real Estate

Monday, April 6, 2020   /   by AJ Shepard

BRRRR Real Estate



Trent:

[crosstalk 00:00:29] Alright, today we're going to talk about the BRRRR real estate investment strategy. For those of you who don't know what BRRRR is, it's buy, rehab, rent out, refinance, repeat. It's an investment strategy used for single-family and multifamily real estate. The idea of it is you buy a property that needs some update or market value.

Trent:

You purchase that, you rehab it, so you put some money into it, make it look nice again, get it rented out. You get a tenant in there or tenants, it's a multifamily. You refinance that property into a cashout refi because a lender will do a cash-out refi up to 75% loan to value. So if the property was worth a hundred thousand dollars you could theoretically pull seventy-five thousand dollars cash back out of the property. You still have tenants in there because you've already got it rented out.

Trent:

That monthly income will cover the monthly mortgage payment or loan payments, and now you have $5,000 that you've pulled back out of the property, and then go and move into a new property or new investment. That's the BRRRR investment strategies.

Trent:

So that monthly income will cover the monthly mortgage payment or loan payments, and now you have $75,000 that you've pulled back out of the property that you can then go and move into a new property or new investment. That's the BRRRR investment strategy. What questions do we have?

Jacob:

What would you say is the biggest risk involving the BRRRR strategy?

Trent:

Not calculating your numbers correctly. It's better to be conservative with your projections because if you're not, you may end up leaving more cash in the deal than you expect. It's not the end of the world if you leave 10-15 grand in the deal, but when you're starting to tie up $50,000 or more in the capital, that you can't then use to buy a new property, then you're kind of S.O.L.

Jacob:

Short on luck.

Trent:

Yes, short on luck. What questions do you have, Jacob?

Jacob:

That sounded great. Where did you hear about this BRRRR method?

Trent:

BiggerPockets.com or Home for Real Estate Investing online.

Jacob:

Without all the hype correct. That's their phrase. They've coined it and a lot of them use it. They wrote a book on it. If you haven't heard BiggerPockets.com check them out. Check out BiggerPockets podcasts where I've learned a bunch of real estate investing strategies.

Jacob:

They also publish books. So check out their publishing as well.

Trent:

Yeah, go bird up.

Jacob:

Awesome. Thanks, Trent.

Uptown Properties
Chris Shepard
3526 SW Troy
Portland, OR 97219
503-941-0276
Fairway Independent Mortgage Corporation
Mike Maier
5410 SW Macadam Ave, Ste 100
Portland, OR 97239
503-545-9879

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