BRRRR Mortgage strategy

BRRRR is a term coined over the last few years that has certainly become a popular real estate investment strategy.

BRRRR stands for Buy, Renovate, Rent, Refinance, Repeat

The key to the BRRR method is finding the right property that you can renovate and increase the value. Ideally you want to find an undervalued property where you can bring up the value exponentially with a renovation. You will then rent it out for enough to cover your monthly expenses with being a cashflow positive position. The last step is to refinance the property to take out your equity from the new increased valuation and start the process again. The increased value of the property due to the renovations and rental income will allow you to take out the equity up to 80% of the new appraised value. This can be a really effective way to build wealth in real estate. This process is not designed for property flippers but a great option for individuals looking to acquire long term investment properties.

The BRRR method is not for everyone and certain markets will dictate the viability of the program. For example, in a market where interest rates have increased since the time of purchase, perhaps refinancing is not the best option. These are all good talking points and items to discuss with a team of professionals. We always recommend building your database of contacts within the industry. You will want to have a knowledgeable mortgage broker, Real Estate Agent, Accountant, Lawyer, Contractor and Property Manager who understands real estate investing,

If you’re an investor and would like more information on how we can help set you up with some Pro Mortgage Tips, we would love to chat!