BRRRR vs Rental Properties? What's the difference?

Question

What's the difference and which is better? Should I start off with BRRRR or rental property? And can I do this with HML's and private money?

Michael David · Answer

Hey @Justine Ricketts!

Have you tried the BRRRR and Rental Property calculators yet? Those may help you decide what level of risk you're comfortable with.

David Greene did a great job breaking down the BRRRR strategy here. To avoid just summarizing his article: not every property will work as a BRRRR. After you acquire a value add property and stabilize it, you need to get some of your money out of the home via refinancing it. You can purchase and refinance with a HML but you should interview several and get terms sheets from all of them. There are dozens of rental properties strategies like short term rentals, DSCR loans, or house hacking a multifamily. You will need more money down for non owner occupied properties (10-25%) but that's where private money lending, partnerships, and the right HML can help.

If you need some help finding real estate services like agents and lenders, feel free to set up a time on my calendar and I'll see what I can do to help.