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WTF is BRRRR?
It’s not gonna make you fabulously wealthy — not any time soon anyway. You won’t be on Twitter’s sexiest investors list. You won’t have much to brag about at backyard BBQs. What you will have is a growing portfolio of rental properties that are cash flow positive.
It’s the boring, tried & true real estate investment method that just simply works.
BRRRR stands for Buy, Renovate (Rehab), Rent, Refinance, Repeat. It’s a method of real estate investing for the small investor. Someone who has saved a down payment, and enough to do minor renovations. You don’t have to be handy, or a carpenter.
First you find a property to buy. It could be a single family home in your town, a condo, a duplex or even a 3 or 4 family home. Generally you want to stay within the mortgage lending property designation of residential real estate — one to four units with no store or commercial units.
Staying in this lane will offer you better terms for financing the purchase, and the renovated value once a tenant is in place. It’s best if you can find a property within a 2 hour drive of your home. In case you have you have to deal with something in the middle of the night — leaks, no heat, no hot water — problems like that. There are property management companies that will deal with this stuff for a cut of the rent, so your mileage may vary (YMMV).
