The BRRRR method is a powerful strategy for real estate investing. The approach involves purchasing and fixing up properties to rent in order to use the funds to finance new purchases. While similar to flipping properties, the end goal is more focused on keeping a property while it grows in value.
BRRRR stands for Buy, Rehab, Rent, Refinance, and Repeat. Here’s a basic breakdown of how it works:
- Buy – Acquire a property that is below market value. This could be a property that needs some repairs or is in the process of foreclosure but still has good qualities that give it potential.
- Rehab – Renovate to increase the value of the property. Determine which types of repairs will give you the biggest increase in value and attract tenants.
- Rent – Rent to tenants for income, preferably enough to cover your mortgage plus some profit.
- Refinance – Reassess the property’s value. Take out a new loan with the property’s new value, which will cover your original investment plus give you more money to work with for future investments.
- Repeat – Use funds to purchase a new property, where you will repeat the process.
Let’s dive into why the BRRRR method works and why you might want to use the strategy for your real estate investing projects.
Why the BRRRR Method Works
The BRRRR method is an excellent alternative to flipping in market conditions where renting can be more advantageous than selling. With flipping, the goal is to make more than your original investment plus the cost of renovations. But, in some cases, renting may beat a flipping strategy.
Renting allows you to create a steady stream of passive income that becomes a source of funds for a more diverse portfolio. The ROI is also often better since the rehabs on the property give you more opportunities for building equity. When you refinance the property after reassessing the value, you’ll get more money toward a new property, as well as potentially better interest rates and mortgage payments that free up even more cash. The increased equity also allows you to build your wealth over time, especially if you use the profits and cash to repeat the process with more properties.
How Dominion Financial Services Can Help
Dominion Financial Services is a privately owned firm that provides a variety of real estate financing options. We have the following loan products for each step in the BRRRR method:
- Buy – Short-term loans and acquisition financing
- Rehab – Fix-and-flip loans and renovation funding
- Rent – Long-term financing solutions for rental properties
- Refinance – Cash-out refinance and long-term mortgage options
Dominion Financial Services has been providing expertise in the real estate financing industry for over 20 years. We have streamlined our processes to get you fast approvals within as little as 48 hours, and we offer flexible terms with competitive rates. Dominion also offers a DSCR price-beat guarantee for 30-year rental loans.
Getting Started with Dominion Financial Services
If you’re ready to learn more about financing your BRRRR project, Dominion Financial Services is here to help. You can contact us by email or phone, or by submitting a loan inquiry on our website. We have a team of experts ready and waiting to help you with your real estate financing needs. Contact us today to schedule a consultation.
