A Full Understanding of the BRRR Strategy

[Omar Butler]

Can someone please explain the BRRR strategy thoroughly. Fun fact, I will be using a hard money lender and the interest rate is 11%. Can someone please explain, so that I can make the right decisions when investing.

[Nick B.]

Here is an example with numbers (an ideal best case scenario):

• ARV: $175K
• purchase price: $90K
• closing costs (including HM interest): $10K
• rehab: $25K
• All-In cost: $90K+$10K+$20K = $125K
• Hard money loan (70% of ARV): $122.5K
• Out of pocket: $2500
• Once the rehab is finished and the property is rented, refinance $122.5K into 30yr fixed
• End result: $52.K captured equity with $2500 out of pocket.

The rent should be above $1300