Real Estate Investing with the BRRRR Strategy.
People often ask me for my real estate investment strategy. So, here it is, I follow the BRRRR strategy for real estate investing. That is, Buy, Rehab, Rent, Refinance and Repeat.
Buy.
Buy with the 1% rule. When purchasing a new investment property, seek to get back 1% of the purchase price in rent each month. For example, if I buy a $100,000 property, I will need to receive $1,000/ month in rental income.
Rehab.
Even if your investment property is a fixer-upper be mindful to not go overboard with rehabbing it. Of course, your property should be attractive to renters, but your primary goal is to create cash flow. I have found myself frustrated when I’ve made the mistake of over-rehabbing a property only to be disappointed at its state during tenant turnovers.
Rent.
Once your investment property is purchased and rehabbed, it’s time to rent. Get your property on the market and remember the 1% rule. That should be your goal monthly rental price, 1% of the purchase price.
Refinance.
It is important to wait at least 6 months before refinancing. When refinancing, banks look at your purchase price in the first six months. For example, if you purchase a home for $100,000 cash and refinance in less than 6 months, you will be eligible to get back 75% of that purchase price. If you wait 6 months on that same home, put in some rehab, and it is then appraised for $120,000 or $130,000, the 75% of that property value is much higher. We wrote about tips for refinancing in a past market update article. I also find this Movement Mortgage article helpful as it outlines reasons to refinance. As in the example above, one reason can be to get cash out of your investment property.
Repeat.
Repeat the four steps outlined above. Now you have increased your knowledge and experience with real estate investing. Use that to your advantage. Keep your investments growing on repeat.
Fluid Realty
The Fluid Realty team has a passion for real estate investing. We would love to help you start or grow your real estate investments. Reach out to us today. For more content like this, follow us on Instagram and Facebook.
The Fluid Realty Team is Jacksonville’s top real estate group and local boutique brokerage. We provide a full-service experience with the best realtors in the area. Our expertise includes luxury beach real estate within the four Beaches of Jacksonville, FL: Atlantic Beach, Neptune Beach, Jacksonville Beach, and Ponte Vedra Beach
