The BRRRR method has begun to take the real estate scene by storm. Although some compare it to existing methods, many unique elements of the BRRRR method make it stand out amongst its competitors. If you’ve been looking to boost your bank account in 2023, here are five easy steps that can help you excel at using the BRRRR method to make money in the real estate game:
What is the BRRRR Method Anyway?
Those that have never heard of the BRRRR method are likely feeling confused. After all, this fairly new method of making tons of income in the real estate sphere is still taking the world by storm, so not everyone (even those who love real estate investing) fully comprehends the method just yet. The more you take the time to study the BRRRR method, and the more dedication you give to the process, the more money you’ll stand to make in the real estate game in 2023 (and beyond).
To put it simply, BRRRR can be broken down into the following: buy, repair, rent, refinance, and repeat. Each of these steps works in tandem with the others to help you maximize your investment profits. You buy a house in need of repairs, repair as much as possible to maximize your home equity, rent out the property to cover loans and income needs as you repair, and then refinance your newly snazzy property to make a tidy profit. After you’ve completed this task once, you can repeat the process over and over to continue bringing in solid income from your real estate investments.
However, there are five more steps you should use (in combination with the general BRRRR method we’ve discussed above) to maximize your investment potential and profitability. To use the BRRRR method for real estate investing successfully, you should use these five steps as follows:
Step 1: Buy Below Market Value
If you’re buying prestigious or at-market value properties, you’re doomed to fail in your implementation of the BRRRR method. After all, you want a property that has clear potential, but that also clearly needs work and repairs to unlock said potential. By buying a property below market value, you can set up a situation where you’ll essentially be able to “flip” your investment later on, alongside many other useful perks.
Step 2: Stick to Your Plan
Before you pull the trigger on an investment into a subpar but potentially-filled real estate property, you need to have a clear budget in mind and need to set up a realistic timeline for when you’ll buy, when you’ll repair, and so on. Doing so, and sticking to this plan, will ensure you do not stray from the strict and proven path that has made the BRRRR method such a massive hit with modern real estate investors. The more dedicated you are to the process, the better your outcome will be.
Step 3: Positive Cash Flow Should be Your Main Goal
If at any point you’re making negative cash flow from your real estate property, you’ll put yourself at risk of losing money using the BRRRR method. This is one of the key reasons that understanding the process, and planning it out in extreme detail (and then sticking to that plan) is so important. If you’re able to rent out the house early on as you continue to build the property’s equity value, you’ll have a built-in way to finance the investment that you’ll be “flipping” later on, after all.
Step 4: Pre-Approve Your Strategy Before Buying
Part of planning for the successful use of the BRRRR method is getting other knowledgeable parties involved. If you can afford it, you should absolutely consult with a real estate advisor to see if your current plan is achievable. For those who cannot afford a consultant, you should simply put extra time and effort into creating a rock-solid BRRRR method plan. If you can master this step, you’ll be using the BRRRR method to generate massive ROI on your real estate investments in no time at all.
Step 5: Create a Consistent System
After you’ve discovered a consistent and successful way to use the BRRRR method, you’ll be set for the future. Using this consistent system that you’ve created will guide you toward a successful financial future. If you’re able to continuously use this system in the future, you’ll unlock the type of income and credit scores that will further your ability to make money in the real estate game. The more effort you put into this creative, complex, but reliable system, the more you’ll gain from the fruits of your labor.
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