One of the great achievements as a real estate investor is building permanent financial independence through rental income. Most real estate investors have preferred using the BRRRR strategy while investing. This strategy has given people a break from the traditional ways of running rentals and real estate businesses. Over the past decade, this method has become popular because an investor can purchase a distressed property and rebuild it and still get back the money spent easily. The BRRRR strategy stands for buy, repair, rent, refinance and repeat. Below is a detailed way of how the BRRRR Calculator Spreadsheet strategy works:
Buy
You purchase a property that is distorted at a lower value than the market value. You could prefer buying the property in cash or through conventional financing. While purchasing the property, ensure you know the after repair value and the maximum offer that you can get back. Remember that this investment can build your portfolio even though it’s sluggish in the beginning.
Repair
The action of furnishing the rentals is involved after purchasing the property. It’s a little confusing, especially if you want to fix the property for attraction instead of satisfying the tenants. You should set a realistic budget to develop a plan to give tenants the long run.
Rent
Landlords are only concerned with seeing the rent income. Some landlords prefer working with property management to enhance quick rent collection from the tenants. The BRRRR strategy plays a bigger role since lenders can’t refinance your work until your property has tenants. It’s advisable to check tenants’ credit ratings and employment details for on-time payments.
Refinance
Once you go to lenders with evidence that you have succeeded in making your property profit, the next step is to take the balance above the actual mortgage and continue to the next step.
Repeat
With rent income as the income, you can use the refinancing to buy other properties and start the process again. Running the BRRRR strategy sounds easy, and it is. Below are the detailed pros of the BRRRR strategy:
Thriving Investment
When you buy property at a low value, repair it and rent it out at a higher value, you get to earn enough income that you can refinance to purchase another property. It gives an investor motivation to purchase more properties.
Consistent Cash Flow
You are lucky once you have good tenants who clear rent arrears on time, since you know your investments will always be in progress. Asking local property managers to offer help with hands in collecting rent is a good idea.
Financial Independence
When your properties are built right into the correct system, continuous earning of money happens, and you finally are independent in finances, and you can purchase more and more properties.
Investors can look for properties owned by motivated sellers using different bases, such as purchasing with cash, reduced price, and discount assessment. Investors should also be able to walk away from a deal if the seller’s final selling price is greater than the maximum allowable offer. It is easier to find a business partner to ease the workload and stress involved.
To make the most of the BRRRR strategy, as an investor, check your debts and raise capital. BRRRR Calculator Spreadsheet can assist you in knowing how much hard cash you will spend or get back from the property after refinancing. After all, every investor struggles to keep real estate paying off for the long term.
Hey, this is Johny Sehgal. I am the owner and caretaker at Finance Jungle. I completed my education in BSC and now heading towards the digital marketing industry. I usually have interests in reading, playing games and watching movies. I also love to write content based on quality information. The main motive of mine is to provide the top and best quality information to my readers. Finance Jungle is the blog for the same.
