If you’ve been around the real estate investing world for a while, you’ve no doubt heard the term, BRRRR. But you may be wondering exactly what it is and whether it would work for you.
Essentially, the BRRRR method is a sustainable investing strategy that stands for "buy, rehab, rent, refinance, repeat." It’s a great way to build wealth and generate passive income without having to put down a large amount of cash upfront.
Here's how it works:
- Buy a distressed property that you can buy for a below-market price.
- Rehab the property, making necessary repairs and improvements to increase its value.
- Rent out the property to tenants, generating income.
- Refinance the property, taking out a loan that is larger than the amount you owe on the original mortgage.
- Repeat the process using the proceeds from the refinance to buy another property.
In order to start BRRRRing, you’ll need to finance the initial purchase with a short-term fix and flip loan. NavCap offers these loans to flippers at all experience levels with terms up to 12 months.
Once the rehab is completed and after three to six months of seasoning, you can then refinance the fix and flip loan into a 30 year fixed rate rental loan or a 10 year ARM. For those borrowers with strong credit and considerable experience, our rental rates start at 6.99%
If you’d like to get more information about putting the BRRRR strategy to work for you, reach out to your loan officer today or contact email@example.com or 888.444.3160 to be connected.
Start your journey to generational wealth today!