In this video, Millionacres outlines BRRRR investing. If you're investing in real estate or plan to start a real estate investing business, you'll eventually hear of BRRR or BRRRR investing. This method of investing in rental property has grown in popularity over the past decade and focuses on finding a distressed property to buy, rehab, rent, refinance, then repeat.

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00:00 Defining BRRRR
00:28 The 5 steps of BRRRR
01:01 Benefits of BRRRR real estate investments
02:00 How to succeed with BRRRR
03:16 How much money you make

Transcript:

What is BRRRR?
BRRRR investing is a popular strategy for investing in rental property.
The strategy involves finding a distressed property to buy, rehab, rent, refinance, then repeat.

This investment strategy is ideal for investors who want to grow a large rental property portfolio quickly.

The 5 steps of BRRRR:

Buy: purchase an undervalued or distressed property with alternative financing such as hard money.
Rehab: Make improvements to the property to add value and get it rent ready.
Rent: Rent the property out to market standards.
Refinance: Use a cash-out refinance to pay off your original hard money loan.
Repeat: Use profit left over from the cash-out refinance as a new down payment for your next investment property.

What are the benefits of BRRRR real estate investments?
You can grow a large rental portfolio with less money invested.
Potentially higher returns because less money is invested in each deal.
You get the tax advantages of owning rental real estate.


What are the drawbacks of BRRRR real estate investments?
Done properly, the BRRRR method has the potential to increase your net worth, create passive income, and build financial independence.
You may not be able to refinance at the desired amount.
You may face longer-than-expected timeline to renovate.
You may lose some cash flow by refinancing with a larger loan.
How to succeed with BRRRR
For this method to be successful, you need to find a property that is undervalued or that's value can be significantly increased with renovations. Many investors use private financing or hard money loans to fund their BRRRR investments.

Try to complete the rehab as quickly as possible.

A rental property may not need all the bells and whistles a full-blown rehab property would require. Before deciding to become a landlord, do your due diligence on what owning rental property entails

Make sure you advertise in the most effective way and run a thorough tenant screening before renting the unit.After the property is stabilized with a tenant, and you have several months of rental history, you can start the process of refinancing.

It's always a good idea to have a backup plan in case the refinance doesn't work out as intended. Once you have bought, rehabbed, rented, and refinanced the property without a hitch it's time to roll your initial investment into a new investment property.

If you did a really great job, you should have additional profit left over that can go into your pocket or be reinvested into your real estate investing business. How much money you make using the BRRRR strategy depends on how good you are at finding the right properties to buy at the right prices. The better you are at finding quality leads, analyzing investments, and managing properties and rehabs, the better your results will be.


Ready to learn more about real estate investing strategies?
Want to Invest like the world’s wealthiest?
Your real estate journey begins at Millionacres.com
Build Real Wealth.

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We believe that participation in the real estate market is an important part of building wealth. We are committed to making sure that everyone understands how to navigate the real estate market. We do this by making information easy to understand and by creating a community to share knowledge and insights.

Interested in learning more? Your real estate journey begins at Millionacres.com
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