If you’ve ever wondered how successful investors turn one rental property into a robust portfolio, this is it! In the last few years, the BRRRR Method has become extremely popular, and I see our investors employ this strategy on a regular basis.
Here’s how to do it:
Buy - You don’t want to just purchase any house. Don’t simply call up a realtor, and pay over market value for a house plus closing costs. You want to find a property below market value, so that you can add value in repairs. The purchase is very important in this process—buy low!
Repair - Repairing can be tricky, because you don’t want to spend more than necessary, but you still want to create a solid home for your tenant. It’s a balance. Don’t over-upgrade the property. You don’t want to take too long either, because then you aren’t making money from rent checks. Check out my video on how to renovate a rental property.
Refinance – I suggest approaching a local bank. They’re way easier to work with than big banks on refinances. Local banks tend to have great introductory rates for refinances. Sit down with a banker, talk about the property, and let them know what your goals are. They’ll be able to match you with a great product that meets your needs. You should expect to receive 75-80% of the valueof the home.
Repeat – Once you’ve pulled the money back, out purchase your second and third rental properties! Rinse and repeat!