Two investors break down BRRRR: buy a property, rehab it, rent it out, refinance the equity, repeat. Buy at $250,000, spend $50,000 fixing it up, refinance at the new $400,000 value to pull cash for the next deal while collecting $2,500 monthly rent.
This is the strategy that people employ. Yeah, they buy a property, you fix it up, you rent it out, and then you refinance it and say it's now worth $100 grand more than what you bought it for. You can get a loan for that exact amount, which you then use as a down payment on another property. Rinse and repeat. Do I have that right? So let's say the property goes from 1 to 1.1. They'll give you 70 to 80% of that.
Absolutely smart business sense. You buy a property, you rehab it, you stabilize it, put a tenant in there. It's automatically going to increase in valuation. Once you've rehabbed it, stabilized it, it's now worth more. So you bought a property for $250,000, you put $50,000 into it, and now it's worth $400,000. That's good strategy. You're collecting $2,500 a month in rent, and now you've got equity. You can cash out in the refinance, pay off that construction loan, use that extra money to go do it again. Rinse and repeat. This is one of our biggest strategies that we utilize every day for our clients.
