If you’re looking to get into fix and flip real estate, then you’ve probably heard of the BRRRR method. But what is it, exactly? And more importantly, how can you use it to make money in real estate? In this blog post, we’ll answer all of your questions about the BRRRR method and show you how to use it to achieve success in the fix and flip market!
What is a Fix and Flip?
A fix and flip is a real estate investment strategy in which a property is bought with the intention of repairing it and then selling it for a profit. It’s a great way to make money in the real estate market and build a portfolio for future investing. Fixing and flipping houses is a proven method to getting started in the real estate game.
The BRRRR method?
The BRRRR method is a real estate investment strategy that can be used to make money in the fix-and-flip market. The acronym stands for buy, rehab, refinance, repeat, and it refers to the four steps involved in this process.
Buy Your Property
When it comes to fix and flip real estate, the first step is always buying the property. This can be done in a number of ways, but most people use a fix and flip loan to finance their purchase. A fix and flip loan is a type of mortgage that is specifically designed for investors who want to buy and fix up properties for resale. It allows you to borrow money at a lower interest rate than a traditional mortgage, and there are no pre-payment penalties so you can pay it off early if desired.
Rehab The Property
The next step in the BRRRR method is rehabbing the property. This involves repairing any damage that was done when the property was first bought, as well as making any necessary updates or repairs to increase its value. It’s important to keep in mind that you don’t want to spend too much money on renovations, as you’ll need to make a profit when you sell the property.
Rent it Out
One of the best ways to make money off a fix and flip property is to rent it out. When you rent out a property, you can collect monthly payments from your tenants which can help cover the costs of your mortgage and repairs. In addition, renting out a property can help you build equity in the home which can be used for future investments.
There are a number of things to consider when renting out a fix and flip property. First, you’ll need to find tenants who will be responsible for paying the rent on time each month. You’ll also need to make sure that the property is in good condition and that all of the necessary repairs have been made. Finally, you’ll need to set up a lease agreement and ensure that both you and your tenant are protected under the law.
Refinance
When you fix and flip a property, you’ll often need to take out a hard money loan to finance the purchase. This is a short-term loan that comes with high-interest rates and fees, so it’s important to pay it off as quickly as possible. One way to do this is by refinancing your mortgage and using the money to pay off the hard money loan.
Refinancing your mortgage can be a great way to lower your monthly payments and save money on interest. In addition, there are no pre-payment penalties so you can pay off the loan early if desired. By refinancing your mortgage, you can free up more cash each month which can be used to pay off the hard money loan faster.
Repeat
The BRRRR method is a great way to make money in the fix and flip market, and it can be repeated over and over again to create a steady stream of income. When you use the BRRRR method, you’re essentially creating a fix and flip business that can generate consistent profits month after month.
There are a few things to keep in mind when repeating the BRRRR method. First, it’s important to make sure that you’re buying quality properties that will generate a good return on investment. You’ll also need to make sure that you have enough money to cover the costs of your mortgage and repairs. Finally, you’ll need to find tenants who will be responsible for paying the rent on time each month.
By following these tips, you can create a successful fix-and-flip business that will generate consistent profits for years to come. You can get started on the BRRRR method with FlipCo Financial, We are a nationwide hard money loan group that funds hundreds of fix and flip projects every month. Contact us here on our website or call us to learn more!