Landlording & Rental Properties

The BRRRR (Buy, Rehab, Rent, Refinance, Repeat) Strategy: A Primer for Investors

Expertise: Mortgages & Creative Financing, Business Management, Landlording & Rental Properties, Commercial Real Estate, Real Estate Deal Analysis & Advice, Real Estate Investing Basics, Personal Development
168 Articles Written
BRRRR

Our company is a big fan of the BRRRR method real estate investment that Brandon Turner coined and BiggerPockets so helpfully made a calculator to help analyze. In this post, I wanted to give an introductory primer on how to approach this investment strategy, from beginning to the part where you repeat it over and over and over again.

B — Buy

They say you make your money when you buy, and that’s definitely true. Although, to paraphrase Tolstoy’s opening line to Anna Karina, all good deals involve a good purchase, but each bad deal is bad in its own way.

The key to remember when buying property you intend on holding is that there isn’t a great feedback mechanism. Yes, you will get an appraisal, but you can always disagree with an appraisal and who is to say whether you or the appraiser is right? I’ve seen some absurd appraisals, and I’ve seen homeowners believe their houses are worth some absurd price (never myself, of course).

When you are flipping, you will always know how well you did because you will be able to look at what your profit or loss was after the sale. With holding properties, you can always deceive yourself into thinking the appraisal just wasn’t any good. In other words, there is a tendency for buy and hold investors to get lazy.

Related: How We Got a Million-Dollar Property Portfolio for (Almost) Free

Don’t get lazy!

The goal behind a BRRRR strategy is to pull all of the money you put into a property out when you refinance it so that you effectively bought a property for nothing, but still have 25 percent built-in equity to reduce risk. So while you may be looking for a different type of property (flippers will usually buy more expensive properties than holders), you still want to get the same equity margin.

Flippers often use the 70 percent rule as a rule of thumb. In short, the rule goes like this:

(After Repair Value X 0.7) – Repairs = Maximum Purchase Price

Want more articles like this?

Create an account today to get BiggerPocket's best blog articles delivered to your inbox

Sign up for free

Most lenders will finance 75 percent the value, so you could say that holders can aim for 75 percent. We generally do this, but that’s because we have some money we can leave in the deals and are looking for volume. If that doesn’t describe you, I would argue you should stick with the 70 percent guideline for two reasons:

  1. Refinancing costs money. Most banks charge a point and there will be an appraisal, title work, and loan processing fees that eat away at your margin.
  2. Aiming for 75 percent offers no contingency. People will go over budget more often than under budget so building in a bit more of a margin is a better idea unless you are going for volume. Again, we are focused more on volume and so we aim for 75 percent, but overall, when I ran the numbers on our portfolio, our all in price came out to 80 percent.

Now, to purchase the property up front you can use cash, a hard money loan, seller financing, a private loan, etc. The upfront financing is outside the scope of this article, but what's important to note here is that different upfront financing options will result in different acquisition and holding costs, and you need to account for those when analyzing a deal in order to hit your 70 or 75 percent goal.

rehab-lessons

R — Rehab

There are two key questions to keep in mind when rehabbing a rental:

  1. What do I need to do to make this house livable and functional?
  2. Which rehab decisions can I make that will add more value than their cost?

Unless you are doing luxury rentals, generally speaking, things like the following are not necessary and will cost much more than either the rental or property value they will produce:

  • Granite Countertops
  • Brazilian Hardwood Floors
  • High-end Stainless Steel Appliances
  • Bay Windows
  • Skylights
  • Hot Tubs
  • Chandeliers

It’s also rarely worth finishing a basement or a garage when it comes to rentals. But on the other hand, two-tone paint, refinishing hardwoods, and adding tile are very often worthwhile.

And, of course, the house needs to be in good shape and everything needs to be functional. Being a slumlord will hurt you in the long run as well as all of our industry’s reputation. We want to rent good properties, but luxury items will cost you more than get back. That being said, there are plenty of value-add rehab ideas that are great for rentals. For more on that, see here.

And as noted before, a little more attention being treated to the front of the house is important. For example compare these two pictures:

picture-1 picture-2

The only differences are window shutters, cleaning the gutters, painting the front door, and adding bark mulch. In the next two, the only difference is adding window shutters, but it’s a big one:

picture-3 picture-4

A bad first impression can sink an appraisal because appraisers are, like everyone else, human. A first impression effects them in the same way it does a prospective tenant. So make sure the front of your houses are appealing.

Related: Introducing: The BiggerPockets BRRRR Calculator!

R — Rent

Banks rarely want to refinance a property that isn’t occupied so renting usually needs to come first. I have talked about the importance of screening before, and it’s critical to screen diligently so you get tenants that will pay each month. But it’s also important on the financing side. While appraisers shouldn’t take too much into account about how clean and pleasant the tenant is, as noted above, everyone is human and such impressions can make a difference. It’s important not to forget this.

It is also worth noting that you will need to notify the tenant that you are doing an appraisal beforehand (I always recommend you request interior appraisals versus drive-bys as appraisers will be more cautious and likely downgrade your property unfairly with drive-bys). Just send out or post a note on your tenant’s door about the date and time and then give them a reminder call the day before (unless your local laws require something else in addition to that). They don’t need to be present, but you should ask them to sweep and clean up as well as to kennel any pets if they won’t be home.

R — Refinance

Not too long ago, it was extremely hard to find a bank that was willing to refinance single-family rental properties. Now, however, it has gotten much easier. Still, when looking for such banks, there are a few things that you will need to ask:

  1. Do they offer cash out or will they only pay off debt? If they won’t offer cash out, you will probably want to move on.
  2. What seasoning period do they require? A “seasoning period” is how long you have to own a property before the bank will lend on the appraised value instead of how much money you have into the property. For the BRRRR strategy to work, you need to borrow on the appraised value. These days, some banks are willing to lend on the appraised value as soon as a property has been rehabbed and rented. These are the best banks to find.

The most effective way to find such banks is to ask around. Ask any investors you know which banks they use, or you can ask here on BiggerPockets, or go to your local real estate club and ask there. If a bank is lending to another investor, there is a good chance they will lend to you, too.

Another way to find such banks that we've used is a bit odd, but it has been quite effective for us. First, pick a market you are investing in, for example, I would pick "Grandview, MO" (a suburb of Kansas City). Then pick your loan range, i.e. "$40,000-100,000." Then go to a website such as ListSource or DataQuick and search for every loan made in that city and that price range in the last year or so to non-owner occupants. It will probably cost you a couple hundred dollars.

Once you have the list, go through it and pick out all the banks. Right off the bat, you know this bank is at least willing to lend to investors in the area and price point you are looking for since they’ve done it before. So there is a good chance they will do it again.

Finally, make sure to provide the lender with as much information in as clear a way as possible to 1) impress them (remember, these are human beings, not computers making decisions) and 2) help them make a decision quickly. The same should go for whatever information, if any, an appraiser requests. For more information on how to do this, see here.

private-money-partners

R — Repeat

Rinse and repeat baby!

If you do the BRRRR strategy right, you should have a cash-flowing property for little or nothing down. If you would like to see a real life example of how we did this, you can check out this article. But overall, the BRRRR strategy is a fantastic way, and in my opinion, the best way, to build wealth in real estate.

Do you use the BRRRR strategy? Any questions about this method of investing?

 

Let me know your thoughts with a comment.

Andrew Syrios has been investing in real estate for over a decade and is a partner with Stewardship Investments, LLC along with his brother Phillip and father Bill. Stewardship Investments focuses on the BRRRR strategy—buying, rehabbing and renting out houses and apartments throughout the Kansas City area. Today, they have over 300 properties and just under 500 units. Stewardship Properties on the whole has just under 1,000 units in six states. Andrew received a Bachelor's degree in Business Administration from the University of Oregon with honors and his Masters in Entrepreneurial Real Estate from the University of Missouri in Kansas City. He has also obtained his CCIM designation (Certified Commercial Investment Member). Andrew has been a writer for BiggerPockets on real estate and business management since 2015. He has also contributed to Think Realty Magazine, REI Club, Elite Daily, Thought Catalog, The Data Driven Investor and Alley Watch.

    Gordon Cuffe Investor from Roseville, CA
    Replied almost 3 years ago
    The biggest challenge is finding a lender that has less than a year seasoning period. What lenders have you found in the Kansas city area that have less than a year seasoning period on refinancing to pull cash back out.? Have you ever run into appraisal problems at the time of refinancing? i e appraising lower than expected. great article by the way
    Chad Hale Property Manager / Investor from San Jose, CA
    Replied almost 3 years ago
    I’ve found 3-6 months to be standard seasoning in my experience in California.
    Andrew Syrios Residential Real Estate Investor from Kansas City, Missouri
    Replied almost 3 years ago
    And we have had issues with properties appraising low, but not much recently (other than when they have done drive by appraisals). Of late, when they are walkthrough appraisals, I have usually been satisfied with where they are coming back at.
    Andrew Syrios Residential Real Estate Investor from Kansas City, Missouri
    Replied almost 3 years ago
    The following banks have been great to work with and haven’t required seasoning periods on refinances for us, or at least only very short ones: – Bank 21 (Tyler) – Cornerstone Bank (Michelle) – Fidelity Bank (Steve) – TriCentury Bank (Travis) Good luck!
    Richard Moreno Investor from Malden, Massachusetts
    Replied over 2 years ago
    Hi Andrew, I have been having trouble with the refi’s as well. Mostly with seasoning period, and also because they want more than a year of history with the LLC, to show rental history ! Thanks for posting the banks ! Hopefully they do business in Pittsburgh. thx
    Mark Monroe Rental Property Investor from Boca Raton, FL
    Replied 4 months ago
    Let me ask you BRRRR experts ( Andrew ) How do you get financing at the end, when you refinance, proving income to qualify Are max out with 4 or 5 Great write up….
    Cody Scholberg
    Replied about 2 months ago
    I just got this BRRRR book, and it sounds like an awesome strategy on paper, but…. every time I’ve gone to a bank to refinance a rental – even one we owned outright and bought with cash, they have said that they will not do that unless it’s a primary residence. Am I missing something here? In short, I’ve tried this strategy before, and neither big banks, small banks, or mortgage brokers will let you do this. Is this real? Please explain. Thanks!
    George Hoover Real Estate Agent from Westlake, OH
    Replied almost 3 years ago
    Great article and thanks for sharing. This strategy is probably worth sharing multiple times! I am challenged by your 70% Rule formula of (After Repair Value – Repairs) X 0.7 = Maximum Purchase Price We use ARV x 70% – Repairs = MAO That is a big spread. Is that actually your formula or is it a typo?
    Brandon Phillips from Cranberry Twp, Pennsylvania
    Replied almost 3 years ago
    George, your formula always gets you a lower purchase price. Which formula you use probably depends on what you can get away with.
    George Hoover Real Estate Agent from Westlake, OH
    Replied almost 3 years ago
    Thanks for commenting Brandon. I feel it is important to stay consistent with the formula in question. I also prefer the formula that results in the lowest of the the 2 MAO’s 🙂
    Andrew Syrios Residential Real Estate Investor from Kansas City, Missouri
    Replied almost 3 years ago
    Got it changed, thanks for pointing that out.
    Bill Briscoe Investor from Jenks, Oklahoma
    Replied almost 3 years ago
    We refinanced on our first rehab as soon at it was done (used a construction loan going in), but the appraisal came in a little low so we only could borrow $97.5. (purchase was $84K plus $22K repairs). So we still have some money in it, but now after 3 years Zillow prices the property close to $145K. The loan balance in down to maybe $95k. So it is worth paying the refi costs to get $14K out? Is 75% the max banks will go to on NOO refi’s at competitive residential rates and 30 yr AM? Or can I get a HELOC or 2nd mortgage on a NOO from anyone?
    Andrew Syrios Residential Real Estate Investor from Kansas City, Missouri
    Replied over 2 years ago
    Occasionally you’ll find a bank that goes to 80%, but usually it’s 75% for investment loans. I would say for just $14,000, it’s not worth refiancing unless you can get much better financing. You could consider a 2nd or what not. But I should note, that often with BRRRR, you will leave a little money in the properties.
    Joe White Property Manager from Philadelphia, PA
    Replied 11 months ago
    Take a moment and analysis if the property could benefit from putting the $14k back into it. If it would greatly increase its value well over the spend.
    Freddy Pettiford from Fayetteville, North Carolina
    Replied 3 months ago
    Why would it not be worth it? Would it not be a good idea to take out the 14k and invest this into another deal?
    Reggie Maggard from Blue Springs, Missouri
    Replied almost 3 years ago
    Andrew Syrios Great article. Ive been striking out finding deals in kc. Mostly marketing to the bs/lees summit crowd. Is direct mail the best way to find a deal in kc?
    Adam Ross from Miami, FL
    Replied almost 3 years ago
    Your link in the article to the 70% rule has a different formula than presented here. The formula in the 70% rule article is the same as what George is suggesting above.
    Andrew Syrios Residential Real Estate Investor from Kansas City, Missouri
    Replied almost 3 years ago
    You’re right, I made a typo and put the “.7” and “Rehab” in the wrong spots. I will see if I can get that changed. Thanks
    Nicholas Q. Investor from Seattle, Washington
    Replied almost 3 years ago
    Great article and inspiring to keep going. I have two rental properties in Seattle. The problem I’m running into is that when I refinance to 75% LTV to pull cash out, the resulting loan payments are too high and do not cash flow. Granted I’m using a traditional 30 fixed, but still with ARMs and other loans I can’t seem to cash flow on single family properties unless I leave at least 65-70% LTV in the loan. Am I doing something wrong? Is this just a product of the hot Seattle market?
    Andrew Syrios Residential Real Estate Investor from Kansas City, Missouri
    Replied almost 3 years ago
    The Seattle market is probably the problem. It’s just really hard to make any sort of buy and hold property work on the coasts. You may need to leave some cash in the property or perhaps if you focused on either multifamily or properties in the suburbs that are usually a bit cheaper, you could make make it work better.
    Bernard
    Replied almost 2 years ago
    Hello, Great article. Does the BRRRR strategy work on the coasts? I’m in CA, does anyone know of banks here in CA that require minimal seasoning periods?
    Matthew Hipp from Columbia, South Carolina
    Replied almost 3 years ago
    Andrew- great article! My wife and I are using this method to get started with our investing. If we have a fraction of the success you’ve found then I will be satisfied. Thanks for contributing to BP. Matt Hipp Columbia SC
    Cynthia Gillespie Investor from Seabrook, Texas
    Replied almost 3 years ago
    We have more than 4 financed properties. Several lenders indicate that new lending rules prevent us being able take cash out. Refi isn’t an issue, but cash out is.
    Andrew Syrios Residential Real Estate Investor from Kansas City, Missouri
    Replied almost 3 years ago
    Many banks won’t do cash out but some will. They are almost always community banks who will portfolio the loans. Rates are a bit higher and they will usually only go 20 years on the amm, but these banks are definitely out there.
    Chad Mayo Real Estate Investor from Greenwell Springs, Louisiana
    Replied about 2 years ago
    Do these typically come with a “balloon” payment? I’ve found a few community banks that will let me cash out refinance but all have quoted me 5/20 with a balloon. The balloon scares me.
    Joseph Young Investor from Portland, Oregon
    Replied almost 3 years ago
    BRRRR While the strategy is getting popular, I can’t help but think what it says about the economy. I see it as multiple strategies rolled into one. Maybe making money with a single strategy is harder to do. The profit margins might getting thin. This strategy seems like “wholesale it to yourself” then “flip it to yourself” then “turn-key it to yourself” then leverage leverage leverage, leaving no/little equity. I am too chicken to do that. But maybe I will get brave enough to try it someday.
    Andrew Syrios Residential Real Estate Investor from Kansas City, Missouri
    Replied almost 3 years ago
    I would simplify it to just flipping it to yourself. My dad calls it “flipping money.” Basically, you buy under market, fix but then instead of selling it, you rent and refinance. So I think you can leave out the wholesaling and turn-keying it to yourself part. That being said, it’s easy to get lazy when you’re doing buy and hold and not getting as good a deal as you should and you really should have some money in reserves to leave in because you just can’t guarantee you will get a good enough deal to “BRRRR out” as they say.
    Peter Eduardo Real Estate Agent from Sarasota, Florida
    Replied over 2 years ago
    Under what form of ownership do you take the BRRRR property? If you want to purchase as a LLC does that complicate the purchase refinance process?
    Richard Moreno Investor from Malden, Massachusetts
    Replied over 2 years ago
    Hey Peter I’m having the same issues ! because I bought it with an LLC the banks tell me I need to have at least 1-2 years of history with the LLC ! They want the rents to show on tax returns.
    Benjamin Voorhis from Irving, Texas
    Replied over 2 years ago
    im actually wondering this same question. If you put them under an LLC it seems like most banks will require commercial loans and that cold be hard to do cash out refi’s. But I am not too sure.
    Jean Norton Flipper/Rehabber from Austin, TX
    Replied over 2 years ago
    I’m doing the BRRR strategy and finding it a REAL Pain in the A$$ to refinance. I will go through your recommendations in this article, but if you find a nationwide lender that promotes this strategy, please let me know. The best deal I could find on my first one was 80% of my purchase price, unless I owned it for a year. The other one I have I paid all cash, but I’m using it for short term rentals – nobody will finance that – any ideas? I’ve got a new one coming up in Alabama – and that’s at a pretty low price, but good returns – some banks have a low-end limit. I hope you address these questions in your webinar, and here.
    Andrew Syrios Residential Real Estate Investor from Kansas City, Missouri
    Replied over 2 years ago
    It’s hard to get 75% sometimes, especially with the market as hot as it is. When BRRRR works right, you don’t need any cash, but often you will need a little. Rehabs go over or appraisals don’t come back quite as good as you think. Things happen. On our properties, we’re at about 81% all in. We can stomach that so we’re pretty aggressive, but it’s good to have at least some money or source of income when starting. Refinancing short term rentals is a tough one. If you have several properties to refinance and most are long term rentals, I would bet a bank would let you roll that one in. Otherwise, I’m not sure.
    Xavier Mc holder from New York, New York
    Replied about 2 years ago
    If you don’t mind could you help me understand how does an investor account for the holding cost without having any cash flow on a property? What I am asking is if you have very little cash reserved is the BRRR strategy actually viable to a new investor? During the first six months before you are required to pay the hard mony lender in full you still have to make monthly payments correct?
    John Murray from Portland, Oregon
    Replied about 2 years ago
    My BRRR strategy works well in Portland Oregon. Never ran into a seasoning period. I do all my own work and when the property hits $50K in appreciative value I refinance. My mortgage broker is great and and never had a problem. Going to refinance 2 of my properties in October and extract $150K. October is a great time frame after the summer feeding frenzy is over. The key to success is buy at a 25-30% discount, renovate for a minimum cost , rent for maximum profit and refinance for a minimum of $50K clear. Being in a market of increasing population adds to the profit margin, especially if the population is aged 25-45 and have little or zero building skills, They will pay a premium for housing.
    Jack Gilbert Flipper/Rehabber from Tacoma, WA
    Replied 7 months ago
    John, I am just north of you near Seattle. I appreciate your comments. I would love to connect sometime. I have a few more questions. I look forward to hearing from you.
    Kim Forgione from Battle Ground, Washington
    Replied almost 2 years ago
    John, would you mind giving recommendations for banks/mortgage brokers in your area that are great to work with for BRRRR? TIA 🙂
    Mike S. from Madison, WI
    Replied about 2 years ago
    Insightful article however I admit to being a bit slow. I’m trying to determine how this strategy might be executed as it applies to me so that I might be able to better comprehend it. I bought a 2 unit last year for purposes of owner occupation and renting the other unit to give me some experience in real estate. I made the purchase, completed some major renovations, and now have secured a tenant for the unit I am not occupying. According to a quick evaluation from my current lender, I have roughly $200K in equity in the property, a $290k mortgage balance, and I am eligible for a HELOC, which the same lender states will allow me to finance 90% of the equity with a variable rate that I can access anytime for whatever purposes. So, if I want to buy another 2 or 3 unit, which would run me ~$450,000, I am seeing this HELOC strategy as gaining the CASH that will allow me to make a down-payment and execute any repairs of such an investment. Is this right? Assuming I execute, then it seems I am going to have a: (1) 1st mortgage ($290K), (2) HELOC (~$180K), and (3) new mortgage (~$270K). It it the assumption that the purchase plus the repairs of the new investment would deliver the promise of delivering back the ~$180K in aggregate equity (which could then be used in the future or retained) OR that the aggregate rental income would cover my new aggregate debt ? Or something else ? Sorry for the drawn out post and questions. Any and all help is appreciated.
    Joe White Property Manager from Philadelphia, PA
    Replied 11 months ago
    That is exactly correct. The HELOC is great as you only use what you need, and you only pay interest on what you use. Very versatile and easy. It allows you to be quick. Yes, you would refinance and if done right, you would get back that original $180k so you can repay that Helock and use it for the next property, then again and again. Each property should be purchased to give you cash flow. Meaning your profit after capital expenses, vacancy rate, mortgage, tax and so on.
    Katherine Straub Flipper from Jacksonville, Florida
    Replied almost 2 years ago
    Karenina* ? Can I request a walk through appraisal or do most banks stick to their guns (no pun) on a “drive-by”?
    Andrew Syrios Residential Real Estate Investor from Kansas City, Missouri
    Replied over 1 year ago
    When banks have asked to do drive by appraisals, we’ve always asked for walkthroughs and haven’t had any turn us down. So I think, normally, they will be fine with that.
    Steven Lucarelli from Moab, UT
    Replied 10 months ago
    Is there any reason that you wouldn’t have the appraisal done immediately after the rehab is complete but before a tenant moves in? It seems like that would eliminate the need to interrupt the tenant and also give the appraiser and nice freshly rehabbed property to walk through?
    Skylar Vincent Real Estate from Oakland, CA
    Replied over 1 year ago
    Hi everybody, I hate asking for value without much to offer but I’m so new I’m not sure what I can bring to the table, save for partnering on deals. I’m looking to get started using the BRRRR Method. However I live in California where it a bit hot for me to start. My question is does anyone have any recommendations as to good out of state markets to start implementing the BRRRR Method? Thanks in advance everyone!!!
    Paul Moore Rental Property Investor from Lynchburg, VA
    Replied about 1 year ago
    Great post, Andrew. What stood out to me is your comment about effectively having zero invested once your refinance. This is one of the beautiful things about real estate, and this strategy in particular.
    Jacob Ayers Rental Property Investor from Houston, TX
    Replied about 1 year ago
    Great stuff, Andrew! I just completed my first BRRRR and I learned a couple important lessons: 1. Make sure to consider the increase in both property taxes and insurance on your newly refinanced property. The lender will likely require you to insure the property for the new value. And of course, your taxes will go up eventually. 2. LTV’s for refinances are different (lower in my experience) than purchases. Agree with Paul Moore that you make a great point about pulling out all of your initial capital. That’s where the real power of the BRRRR is!
    Chad Urbshott from Boca Raton, FL
    Replied about 1 year ago
    Makes me laugh when Brandon says he coined this term. Hahaha, this strategy has been around for eons, and I first heard the exact term BRRR at LEAST 10 years ago, before BP was even around. Lol
    Andrew Syrios Residential Real Estate Investor from Kansas City, Missouri
    Replied about 1 year ago
    Well in fairness to Brandon, I was simply under the impression that he coined the term BRRRR. Perhaps I was mistaken.
    Denise Graves from Victoria, BC
    Replied 12 months ago
    Andrew, Good overview of this strategy! You mentioned it’s rarely advantageous to finish a basement. On that point, we have had good success renovating basements into self contained suites. This has helped increase the equity even more and gives us 2 rental units to help carry costs instead of just 1. Will be linking to this article in an upcoming blog post. Thanks, Denise and Sean
    Rodney Reeves Rental Property Investor from Atlanta, GA
    Replied 10 months ago
    I wanted to bring up that point too but you beat me to the punch Denise! I am looking to renovate my unfinished basement to turn it into a 2 bd 1bth apt (there’s about 1300 sqft down there). This will help turn my home into a true house hack and pretty much a duplex since there’s already 3bds and 2bths upstairs.
    Joe White Property Manager from Philadelphia, PA
    Replied 11 months ago
    I agree. In Philadelphia, this seems to really add value.
    Jim S. from Cleveland, OH
    Replied 9 months ago
    Great article Andrew. I’ve never seen the BRRRR Strategy explained in such a simple, concise way. Thank you for sharing your knowledge.
    Traci Howell Investor from Dawson, Georgia
    Replied 8 months ago
    OK! I jumped in. I’ve found a property, feel it meets the criterion but it is not in my local market- there is not much going on here. I am going to visit the area when I put my offer, but I am so unsure about the numbers. I have owned and managed an 8+ property portfolio in the past but none were over 4 units. This one is 20 units. I am unsure how to valuate the ARV. I have checked other rents on the street. For a 3br 1 ba it runs from 650-700. These are 2br 1ba and currently rent at 395-475. I’m guessing it is due to condition (the large range) which I will verify. They are being sold as is. Is anyone willing to help me valuate? The owner is paying water. The gross income is 18.1K annually, and the expenses 9.1K with the NOI being 9k. Cap rate is 7.5%. If I need the cap rate to determine price, but I can negotiate and that causes the cap to fluctuate- Im stuck. Plus I have not spoken to any investors of hard money- so I have no idea how to calculate those costs. I did most repairs myself on the portfolio I had, plus grew up in wholesale building materials, so I have that in the bag with getting help there. I can look and get close on repair costs. Please Help. Thanks.
    Niki Nechita
    Replied 6 months ago
    Great stuff! Does anyone in Los Angeles, San Fernando Valley , Palmdale/ Lancaster is using BRRRR Strategy? Thanks.
    Ben Travis Flipper/Rehabber from Nashville, TN
    Replied 3 months ago
    This is very interesting. I would personally start slowly with this method…one home per year, pull out max refinance, work out all the kinks and give a few years to learn by doing. Then after the third one or so, try to ramp it up to refinance in the 3-6 month time frame. Assuming I have (or by then, have found) all the right players. Just reading through the comments, if you’re process isn’t a well oiled machine…you’re in for trouble. Your dependent on a lot of things out of your control with this method.
    Ken Bailey Contractor from yucca valley, ca
    Replied 2 months ago
    Thank You Andrew, Very informative and well presented. BRRRR is definitely x10 over any other method.
    Justin Ake
    Replied about 1 month ago
    I'm not totally sure I understand the refinance portion of this strategy. What's the difference if I cash out on a refinance or just pull out another commercial loan for the next purchase. Either than maybe some small differences in interest rates, I'm still borrowing money that I have to pay back. I'm having a hard time wrapping my brain around the concept. Any help would be greatly appreciated. Thank you.
    Fabricio Laboriel
    Replied 10 days ago
    I am trying to do the BRRRR strategy very soon but what confuses me is getting multiple investment loans after you finish the BRRR strategy. How long do you have to wait to apply? What it is required in order to be approved in your second loan? third?.......
    Boon Wei Aw
    Replied 8 days ago
    Need help trying to understand the refinance part of brrrr. Say you cash out for your current property for pay for your mortgage loan, Don't you now have a refinance loan to pay? Wouldn't this then make your cost per property go high and you have to up the rental to cover? Would need help from experience investors. 🙏