BRRRR is all about leverage. So how can you arrange the best leverage for these real estate investments?
We’ve helped clients with the BRRRR process for over 20 years. What’s the biggest error we see people make?
They don’t start with the end in mind. So they don’t maximize their leverage.
Many beginning investors take the order of the BRRRR acronym literally. They buy, rehab, rent, THEN try to figure out what the refinance will look like. That’s actually doing BRRRR wrong.
Going into the refinance blindly is not how you get the best leverage for your real estate investments. At best, you won’t know how the property cash flows. At worst, you can’t get a refinance loan at all.
Let’s look at what you need to do instead.
Prepping for the Best Leverage for Your BRRRR
Does it make sense to buy a property (with a higher interest loan), put all the money into repairs, rent it, and THEN figure out whether it’s a good or bad investment?
It takes just a little time and effort up-front to figure out if you can get the best leverage for the property.
We like to call this time up-front “building your BRRRR buyer’s box.” It’s a process that helps you prepare for the refinance ahead of time so you don’t do BRRRR wrong.
Going into a property, you should know:
- Your max LTV
- Your cash flow minimum
- What rehab budget you can afford
- How much cash you’ll need to bring in.
Creating the Best Leverage for Your Real Estate Investments.
Download our free BRRRR Checklist to understand the numbers of your refinance. Make your rental property a success.
Leverage determines whether you’ve done BRRRR wrong or right. All real estate investing hinges on leverage, and our goal is to help you create the best leverage possible.
Using the right debt will accelerate your business, while the wrong stuff will slow your investing career to a halt.
Read the full article here.
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