Well, bombers, ready to gain new knowledge and undermine the metropolitan real estate market? Personally, we always look forward to new slang lessons. The weather in the last days of the month seemed unexpectedly not spring, so brrrrr fell from my lips. It turns out that this exclamation conveys not only our indignation at the thermometer readings, but also one of the principles by which they can act the owners real estate That's the discovery!
❝BRRRR (Buy, Rehab, Rent, Refinance, Repeat) is a strategy popular among investors who want to increase the profitability of their real estate and maximize capital in an accelerated mode. ❞
The name of the strategy encodes the stages that the owner goes through to achieve the goal:
- buy – purchase of the corresponding residential area;
- rehab – carrying out repair work to improve its condition;
- rent – surrender ready object for rent;
- refinance – redistribution of earned funds for the purchase of the next similar object;
- repeat – repetition of a closed circle of purchase, repair and delivery.
Learn more about BRRRR
Real estate in poor condition is chosen for purchase. It can be purchased at a price significantly lower than the market market market market market. In the repair, the main thing is to make a beautiful facade and ensure the availability of all amenities, so you can avoid using expensive materials. The key goal is to return the invested funds as quickly as possible to reinvest them. Such circulation of capital in nature allows you to significantly expand the investment portfolio and create an eternal engine for receiving passive income. Getting involved in such a case, it is worth remembering the possible risks associated with the level of complexity of the repair, demand and demand. the market situation at the time you reach the stage of refinancing. In order for the scheme not to fail, it is important to carefully plan all stages, have a good understanding of the specifics of the market and be able to. capital/">look into the future.
Example of use:
- I bought one piece in a great location. It's true, it's not in the best condition, but I'll bring it to divine shape and rent it out, and then from the rent it will be possible to save money for another apartment.
- Oh, so you want to act on the BRRRR strategy?
— …?
— You described it yourself – a purchase with the aim of repairing, handing it over, and then doing it all over again to earn even more.
We do not suggest that you immediately break into the market and test a new approach to enrichment, but buying an apartment on secondary market I haven't bothered anyone yet... If you want - live, if you want - surrender. A completely ready-to-move-in property opens up endless possibilities.
