![]() ![]() ![]() When a person goes to refinance such a property, a bank will typically only refinance up to 75% of the new value. Of course, as with all investments, the math has to work for the strategy to work, and there are many BRRRR pros and cons to consider. ![]() The investor finds another property and builds wealth.The investor secures a loan to cover the purchase price and rehab cost.The investor finds a tenant for the property.The investor fixes up the property, building its equity.The investor looks for and purchases a distressed property with potential.And then, the investor does the whole process over again with a new property. The owner then obtains a refinance on the property to pay off the short-term loan and turn the property into a stable, long-term, cash-flow-positive property that continues to build equity. Then, after the property has been finished, it is rented out to a tenant instead of sold. In BRRRR real estate investing, the property is treated like a fix-and-flip, using short-term financing such as private money, hard money, a home equity loan, or cash to acquire and rehab. It’s a method by which real estate investors buy distressed properties, but the difference is the intention to keep them as rental properties instead of selling them. BRRRR stands for buy, rehab, rent, refinance, repeat, and it is a great way for investors to earn passive income. Many investors have fast-tracked their real estate business with the BRRRR real estate strategy. ![]()
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