- BRRR Real Estate Investing Loans
- Buy, Rehab, Rent, Refinance
- 660 Credit Score Required
- Access to 100% Financing for Purchase & Rehab
WHAT IS THE BRRR METHOD?
BRRR stands for Buy, Rehab, Rent, and Refinance. The first two steps are exactly like a fix and flip deal—meaning you’ll find a motivated seller willing to sell their property at a discount and then rehab the property.
Instead of reselling the property after the rehab, you’re going to convert it into a long-term rental property. You’ll find a tenant and then refinance the property into a conventional mortgage through a bank.
The reason you’ll find a tenant first is because a bank is more likely to take on your loan if you have someone paying rent to you from the start. You also need to refinance the loan as hard money loans usually have 5-12 month terms with high interest rates.
Biggest Challenges of the BRRR Method
Length of Time – You’re not only in the deal for the duration of the rehab, but also for the long haul as the owner of a rental property. You might see this as a positive, but not all do.
Securing Funding – We know the challenges of securing reliable funding for a real estate investment. It’s literally why we exist. Read more about our Hard Money Loans and see how we can make this process not a giant headache.
Managing the Rehab – Perhaps the most stressful part of any real estate investment. We do our best to help you by providing a former general contractor to be your project manager throughout the rehab process.
Finding Renters – While our Member’s Area provides insight into how Ryan (our CEO) finds amazing renters time after time, we recognize this isn’t always a fun step—especially if you’re under a tight window.
Refinancing your Loan – As mentioned above, the hard money loan is to get you through the rehab process, but then you’ll need a conventional mortgage moving forward. Many banks require that you have prior experience as a rental owner and that you also have a decent amount of funds in the bank. We can’t guarantee we can find you a bank to work with you, but we can recommend ones that we’ve worked with before that have easier requirements for first-time rental property owners.
Your Financial Situation
Between those three types of deals, a BRRR will usually require the most funds due to the long-term nature of owning rentals. Wholesale requires very little, and you’re out of a fix and flip within 6 months (ideally).
A BRRR deal results in you owning a long-term rental property. And while the cash flow is fantastic, you have to weigh that against your ability to cover vacancies, maintenance, and emergencies.
Your Financial Goals
What is your goal with real estate investing? Most investors eventually would like to have a diversified portfolio, but where do you want to start?
If your biggest goal from the start is passive cash flow, then you’re going to gravitate towards BRRR deals.
If you need fast cash in order to fund other projects, pay off a credit card, or purchase something in the near future (like fixing your car or buying a new laptop), then a wholesale deal is the best way to go.
If you’re looking for the big payday and to be out of the deal in 6 months, then a fix and flip is the way to go.
The Property Itself
Once you take a look at the property, the ideal strategy often presents itself. For example, a property with minimal repairs would be ideal for a BRRR property. You can quickly do the renovation and get it rented out.
Or, a property with a massive rehab requirement may turn you towards a wholesale deal. Let someone else deal with that headache while you walk away with $5k.
Your Risk Tolerance
Lowest Risk – Wholesale deals have clearly the lowest risk of these three deal types because there are few moving parts. They’re simple and require little capital on your part.
Medium Risk – Fix and flips carry more risk because they’re longer, more complicated, and require your own money or a loan.
Highest Risk – BRRR deals are the riskiest because you have to go through the whole process of a fix and flip, as well as trying to find a new 30-year loan to refinance your hard money loan. You also need to find a renter, as well as manage the property and tenants for as long as you have the property.
How We Help You With BRRR Deals
100% Financing – 37% of our loans qualify for 100% financing, meaning that the borrower brought $0 to the closing table. If your deal is good enough, then why wouldn’t we fund the whole thing?
Easier Loan Qualification – We believe everyone deserves a chance at financial freedom, if they’re willing to work for it. That’s why we have no credit or experience requirements.
Software – Our Investor’s Edge software is the key to finding & marketing to motivated sellers repeatedly
Dedicated Loan Advisor – We provide all borrowers with a single point of contact to help manage every step of the process
Dedicated Rehab Project Manager – You will have a former general contractor assigned to help you through the rehab process. They will work with your contractor to verify all pricing, and conduct a weekly
Recommend Refinance Lenders – While we can’t guarantee refinancing with another lender, we can show you the ones we’ve worked with in the past. Many lenders don’t like refinancing hard money loans or to work with first-time rental owners.
Training Program – Inside our Find-Fund-Flip System, our members get access to over 100 videos, five pieces of software, and numerous downloads such as contract templates and postcard designs.Everything you need is in here.