BRRR Method: Best Way to Buy

So…. Your fancy dipping your toes into the BRRRR market? (That’s buy, rehab, rent, refinance, repeat). It’s a business-savvy way to invest and—with the right strategy—you won’t need a ton of capital to get started.

The following concentrates on renting the property out but can equally be applied if you’re planning on selling once the rehab work is complete (more commonly referred to as “fix and flip”). 

Finding a Suitable Property

• Buying choices: BRRRR method
• Securing finances: BRRRR method

Buying choices: BRRRR method

Purchasing a BRRRR investment property is very different from buying a home to live in. Sure, you can scroll through real estate listings. However, this is time-consuming and—unless you’re lucky—unlikely to reap great results.

Instead, try one of the following methods:

• Partner with a real estate wholesaler: This is a real estate professional who specializes in bringing distressed house sellers in contact with buyers. You can find these “middlemen” in many ways—but all have one thing in common… They usually advertise by saying they’ll buy any house for cash. Adverts can be found on social media (Facebook, Insta, TikTok, etc.), billboards, bandit signs (those posters you see on street corners, lampposts, etc.), or through direct mail campaigns. If you get a letter offering to buy your house for cash, then contact them and say that you don’t want to sell but want to be added to their buyer’s list.
• Visit estate sales: Find properties going under the hammer, many of which are mortgage foreclosures, those with unpaid property taxes, or outstanding homeowners association fees. You can find out about these through county court websites, county sheriff websites, county treasurer websites, tax collector websites, the United States Treasury Department, and auction websites (Hubzu, Bid4Assets, Auction.com, etc.).
• Go “driving for dollars”: This involves, quite literally, driving around the neighborhood you’ve chosen to target and looking for potential properties. You’re searching for those that look run down, abandoned, with overgrown yards, etc. Their owners may well be keen for a quick sale at below market rate. You can also do this virtually, thanks to the wonders of Google Maps and apps, such as DealMachine.
• Post bandit signs: Post your own bandit signs in the area you’re looking to purchase or carry out a direct mail campaign to potential properties.

Securing finances: BRRRR method

Of course, if you don’t have the upfront capital then you’re going to need to secure the finances for your purchase. There are various options, many of which come under the overarching term of “hard money loans”.

The most common types of lending that are used for the BRRRR method include:

• DSCR Loan: This uses the potential rental income against the outstanding monthly repayments. Not based on your net worth or income.
• HELOC Loan: This gives you a revolving amount of credit (a bit like a credit card) and is secured on the equity of your current home.
• Fix & Flip: These are special loans designed—as the name suggests—if you intend to fix and flip, rather than BRRRR.
• Refinance on your current home: You could remortgage against the equity in the home you live in.

These are just some examples of how you can finance your first BRRRR purchase. Once you’re on the ladder and generating income from your property, you’ll also be building equity. This provides further opportunities to borrow. 

Partnering with a money lender that specializes in such loans is the best way to discover the way that works best for you.

Time to Discover Your BRRRR Method Financing. Contact BRRRR Loans Today 

BRRRR Loans is a leading financier that offers a variety of loan programs to suit pretty much all lending needs. Our closing times are some of the best in the industry and just wait until you see our market-leading rates!

Don’t just dream about investing in property—make it your reality…

Head to https://www.brrrr.com/loan-programs for more info and get in touch today for a no-obligation quote.