L
Larry Goins on the
BRRRR strategy
and Filthy Riches… An example scenario may look
Not too long ago, founder of Purchase price: $50,000
something like this:
ARV: $100,000
Realty411 Magazine, Linda Pliagas
and I were hanging out with some
Rehab costs: $10,000
fellow investors in Texas. If you know
Linda, she has a fantastic
Refinance: $75,000
personality, is a serious magazine
editor, and is great at bringing people Ongoing rental income: $800
together. She also actively invests in per month, gross, before debt
real estate herself. She mentioned service and expenses.
that she was just getting ready to refinance some of the free and
.
clear rental properties she had purchased for cash. I’m like “oh,
you’re are doing the BRRRR method.” She hadn’t related the term
to what she was doing, but it is a popular model being thrown
around on the online forum BiggerPockets.
So, what’s BRRRR? How does it work? Is it the best solution for
investors?
BRRRR stands for Buy, Rehab, Rent, Refinance, Repeat.
This is a cash and cash flow real estate strategy. Investors will
purchase properties for cash, or use shortterm, hard money type
loans to purchase property. Then dig into repairs and
improvements to add value and get them rent ready. Then once
that property is in shape and performing, investors attempt to
refinance to get cash out and/or get better longterm financing
terms, which create more cash flow. The cash extracted can be
used to acquire another rental property, while keeping the
previous one as a rental.
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BRRRR vs.
What is BRRRR in Real Estate Investing?