Lender · Knoxville, TN · Member since 2015 · 55 posts · 48 votes
Howdy all,
I thought I would share my property that I implemented the BRRRR strategy on. We purchased for 90k put about a 25k rehab budget into it with a hard money loan. Refinanced with an ARV at about 150k. It's currently cash flowing $400 a month with approx. 40k in equity in the house. Check out the before and after pictures. @Robbie Wyness
You can't always get every single penny back out of a deal. My last BRRRR, I left about $10,000 in the deal because the appraisal came in very low (rural, no comps). If the appraisal had been spot on I would have made $60,000 profit. The property still cash flows $1800/month (4-plex) so in my book it's a great deal. You basically paid $10,000 for a property that makes you $400 a month. Job well done!
@Joshua D. I manage it myself, that $950 includes property taxes and insurance in escrow, but I take $100 dollars a month and put it in saving for repairs and capex. So it's more like $300, you caught me! lol
@Will Coleman Similar to yourself I've been picking up SFH's. I bought one in 2016 and one in 2017. Planning on picking up another one in 2018 once the renovations are nearing completion.
Brrrr is an investment strategy where you buy a property with cash. Then you renovate the property. After renovation you rent the property. Once rented you go to a bank and get them to refinance, so you can pull your money out of the house and still keep equity potentially gaining monies. Then you take the money and start over.
@Jimmy Jiang Welcome to BiggerPockets! You've asked a question that is definitely explained here on BP, so I recommend that if this thread doesn't quite explain it, that you do a search for the term "BRRR" or "BRRRR" and do a ton of reading, listing to podcasts, etc. Us randomly taking over the OP's thread to explain it here isn't quite the place, especially being the answer is out there for you already. I will say that it stands for Buy, Rehab, Rent, Refinance, Repeat. Enjoy!