Have you heard of the BRRRR strategy? A What? BRRRR— It stands for Buy, Repair, Rent, Refinance and Repeat. 

If you are a real estate investor and want to learn an awesome strategy to implement in Vancouver, FV or Chilliwack, then you must watch this video to the end as we dive into this popular method to grow your rental property portfolio and we are going after it right now.

Let's define what BRRRR stands for:

1. Buy: purchase an undervalued or distressed property with alternative financing such as hard money or private loan.

2. Rehab: Make improvements to the property to add value and get it rent ready.

3. Rent: Rent the property out to market standards.

4. Refinance: Use a cash-out refinance to pay off your original hard money loan or private loan.

5. Repeat: Use profit left over from the cash-out refinance as a new down payment for your next investment property.

This method allows you to grow your real estate investment portfolio without having to tie up all your money on one property.  eg. If you wanted to own 5 properties, you would need large downpayments for each home and with this method you are able to pull money out of the properties you BRRRR and buy another one to repeat the process.  If done properly, this method can increase your net worth and passive income.  Ultimately financial independence. I would say this method is perfect for a buy and hold strategy for 10 to 20 years. 

So today we are in Chilliwack and I am going to show you a home that needs TLC and repair and the BRRRR strategy would work well in this home.  So let's go inside and take a look.

So with this property, if say it sell for $350k, you spend xxx amount in here is my estimate, rent it out for $2200 to $2500 month.  Analyze it.  Equity take out.

This strategy does come with risks.

Here are 3 risks associated with the BRRRR method:

1. The risk of unable to pull out the desired amount after the Reno’s and rent, eg the refinance appraisal came back lower than expected, or the market took a dip and you might have to prepare for holding it until the market goes back up and try in 6 months again.  It is so key to buy at the low and not overpay for these properties.  This is where a good Realtor, would come in to play.

2. The risk of a longer than expected time to renovate the home and the holding costs, as well as unexpected surprises during the Renos that may take much longer to finish.

3. You might lose cash flow because the refinance requires a larger loan and possibly a higher mortgage rate.  However the name of the game for me anyway is long term strategy and if you can think 20yr game plan, then you should be fine.

Hope you found this video helpful. 

Again, my name is Solomon, our team and I at the BC Elite Real Estate Group are here to help you with finding these types of deals.

If you are in the market to get into one of these homes and perform this strategy then reach out to our team of buyer agents and we are here to help you by calling or texting 778-655-7999 or visiting our website searchbcrealestate.com.

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Thanks again. Take care and stay safe!