Inquiring minds wonder of the BRRRR method makes sense in today’s market of higher interest rates and talk of recession. First question of course would be, what the heck is the BRRRR method? It’s a real estate strategy that massively improves your net worth by BUYING distressed investment properties. REHAB the properties. RENT the properties. REFINANCE the properties to pull cash out to purchase more investment properties to REPEAT the process all over again. The answer to the question is YES the BRRRR method, if done correctly, works very well during this current market. Matter of fact, the BRRRR strategy can improve your net worth tremendously.
B is for BUYING
Finding a distressed property to purchase is the easy part. It’s the financing that could be hard. Valor Lending Group has over 100 lenders that specially fund investment Bridge, Fix and Flip, DSCR, and Construction loans. No matter what level of rehab the property is in, Valor Lending Group can find the right lender for you.
R is for REHAB
Rehabbing a property is the most time-consuming stage of the BRRRR method. Making sure it is safe, habitable, and up to the rental market standards in your area is very crucial. There should be some thought about the level of upgrades the property needs depending on its location and market rents. You never want to under or over rehab a property in a specific neighborhood.
R is for Rent
Renting your newly rehabbed property to new tenants is one of the most important stages of the BRRRR real estate strategy. This will lock in your passive income and enable you to continue your BRRRR method. Many investment property loans are based strictly off of gross monthly rent and the ability to cover the principal, interest, taxes, and insurance payment. Getting the highest and best rental income will become a key factor in the BRRRR equation. See more on financing below.
R is for Refinancing
Refinancing the newly rehabbed property is very important. This will allow you to access equity to purchase more properties to build your SREO. The most common investment property financing is a DSCR loan. DSCR stands for Debt Service Coverage Ratio. The ability to produce enough rent to completely cover their PITI payments. The higher the ratio gets, the easier it becomes for that entity or person to obtain financing for the investment property. DSCR is gross rents divided by new PITI (principal, interest, taxes, and insurance) monthly payment. If your property is collecting rents that covers your current PITI payment your property debt services. This program is excellent for investors due to no taxes or income.
R is for Repeat
Repeat is the final stage of the BRRRR method. Repeat the stages in order to maximize your real estate wealth. When repeating, always take notes during the process so you know what worked and what didn’t on the next round of the BRRRR method.
Whether you’re an avid real estate investor or purchasing your first investment property, the BRRRR method can be used to your advantage.
And that’s the undeniable way to use the BRRRR method for your real estate investing and improve your net worth!
Your loans can be the next one that I fund! Call me today 480-773-0714!
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Recap of our Loan Products:
- Stated Income Loans (No Tax Returns, no W-2s, No P&L) up to $3M
- Bank Statement Income Loans (Great Bank Statement Programs for business owners and self-employed)
- Hard Money Loans (As low as 20% down / minimal documentation) Fund in 7-10 days
- Flipper Loans (Flip a property with one of our many options) up to 90% leverage
- Commercial Line of Credit
- 100% Financing (cross collateralize- hard money)
- Foreign Nationals Loans (no social security or residency required)
- Raw Land & Lot Loans
- Ground up Construction for spec homes, custom homes and commercial ground up to $500M
- 2nd Position Loans up to $5M
- Rental Property Loan – No tax returns or DTI calculation! Based on subject property cash flow
- Farms, Vineyards, Ranches and Agricultural Properties (20-30% down)
- 10% down Jumbo’s with NO MI up to $1.5M
- Manufactured Housing / Mobile Homes (20% down / 620+ credit score)
- Acreage Properties
- Commercial Loans up to $500M
- 5% down Jumbo (Up to $2M Lender paid PMI)
We also offer:
- Conventional Conforming Loans (under $647,200)
- High Balance Conforming (from $647,200-$970,800)
- Jumbo Loan Financing to $10 Million / Super low rates! / 10% down Jumbo to $3mm
- FHA, USDA
- Reverse mortgages up to $1 Million Value
- Cash Out Refinancing
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