Brrrr vs. Rental Properties

1 Reply

I mean it depends on how you define them. In my mind when defining these strategies I do see several difference. 

BRRRR - stands for Buy Rehab Rent Refinance Repeat - the Goal of a BRRRR is to buy something with a significant value add opportunity, fix it up, rent it out and then use that rent to justify the value for the refinance. The Goal of this strategy is to pull out all of the money you have invested in the property when you do the refinance.

Rental Property Investing - In my opinion is all about cashflow, this is the type of investing I do. I evaluate the property from a variety of different angles and typically try to buy something that is undervalued or where there is a value add play but the goals is cashflow or return on investment. I don't plan to refinance the property to pull my $$ out I'm investing it to get a double digit return.

Now you can do a BRRRR on a rental property where you would combine them and evaluate what the properties cashflow will be after pulling the money out which is what many investors do. They like to recycle the money they have and roll it into the next project which is probably where the lines between the two strategies get co-mingled.

I hope this helps. Best,

Jon

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