BRRRR Method

Transcript:

Not only is this strategy fun to say “BRRRRRRRR” but it is actually one of my favorites. 


This method is commonly used by investors to roll money from one investment to another. The key to this process is to find great flip properties that has high rent rates.


To make this strategy work there must be some equity in the property your are flipping and you may want to refinance with either the HELCO loan or an Equity Loan. 


These loans are not easy to obtain and will have to be verified by an appraisal. If this is your preferred exit strategy the moment you start to rent out the units call your preferred bank or credit union (preferably ones that do not have seasoning requirements) to start the refinance process. 


If you play your cards right then you can not only pull out the equity loan to purchase another property but, you have a positive cash flow due to the tenants still in the property. It is a double win and one of the best and oldest strategies out there.


Let's do a recap of everything we just talked about. 


First Step: Find a flip property that will have enough equity at the end of the flip for you to roll over into the next property.


Second step: Rehab property and rent units out to tenants


Third step: Get bank or credit union to refinance property


Fourth step: Take proceeds to roll into another property and continue the process


Simple yes indeed. Here is the catch this process works great if the property has a good rent range, that will cover the refinanced mortgage amount. The last thing you want is to be stuck with an incredibly high mortgage monthly payment. 


Another tip is to use a property that you own free and clear to maximize equity amount. Please evaluate each property to make sure that this method will work for that property. There will be times that this method will not work and it may be best to do a traditional sell.


Complete and Continue