Is there anyone who can tell me more about Brrrr?

3 Replies

@Katrina E McMahon - at the highest level you buy a property in need of repair for far under market value (that in alone is a winning real estate strategy). You then rehab the the property to reach the desired market value. You rent out the property to achieve appropriate positive cashflow after covering all your costs and depending on the type of property, investment, lender...etc you refi to get roughly 75% LTV of the new appraised value. You pull out your entire initial investment (thus an infinite cash-on-cash return) and own a property where the tenant is paying your mortgage, associated costs with room left over to pay you a few hundred bucks in positive cashflow. You take your funds and repeat the process.

Below is an example with numbers to help demonstrate:

You buy a property for 45k

You spend 30k rehabbing the property and upon completion the house appraises for 100k.   You rent out the property for 1,100/m and in parallel you are able to refi the original 75k (45+30) investment.  

You now have all your cash back and can go use it to repeat the process on a new property. You also owe 75k on a 100k property (you've created 25k in equity) and in addition the tenant is paying your mortgage, costs and also paying you a few hundred dollars in cashflow.

There are other items like holding costs, seasoning you'll need to be aware of, but the above is the basic strategy. 

Hi, @Katrina E McMahon ! Here is a link to some of the podcasts covering the strategy (if it doesn't connect directly, just go to the search bar at the top of the page, filter by "podcast" and type in BRRR Strategy - should take you to the same page)

https://www.biggerpockets.com/search/podcast?term=...

If you haven't already, subscribe to the podcast as soon as you can....it's been the most valuable tool in my real estate investing journey. 

Best of luck to you!