There are many formulas that real estate investors can use as a guide when considering an investment to ensure that their investment is sound. BRRRR is an abbreviation for one of the many methods investors use as a strategy for building their portfolio, buying, renovating, renting, refinancing, and then repeating the process.
This method of buying and holding investment properties will help you create a healthy portfolio with solid cash flow that will build wealth and provide you with a generous passive income in your retirement. So read on as we explore what Grand Rapids investors should know about the BRRRR method.
The first thing Grand Rapids investors should know about the BRRRR method is to focus on properties below-market price, allowing room for more profit. And, unless you have a background in construction and home repairs, it is best to hire industry professionals. This phase of the BRRRR method is where your team-building skills come into play. A good team allows you to move quickly, assess the property, and have reliable data in hand to make an offer. Being the first to make an offer can often make the difference in being the early bird that gets its worm. Using the BRRRR method is easier when working with experienced investors like the pros at Respected Home Sales. Our full-service team of the industry’s most highly regarded service providers is ready to jump into action for you.
Another thing that Grand Rapids investors should know about the BRRRR method, once you have inspected the property and determined your costs and the after repair value, ARV, the purchase price should be no more than 70 percent of the ARV for the BRRRR method to provide the best returns. When factoring in your budget, don’t forget the holding period during which you will carry the costs to own the property before you can begin to collect rent. And remember, this is a rental, not your primary residence, so stick to making needed repairs and only necessary upgrades. And don’t forget to budget for unexpected repairs. Professional investors like those on the team at Respected Home Sales understand everything Grand Rapids investors should know about the BRRRR method. At Respected Home Sales, we are passionate about improving our community while helping you to build your real estate empire.
Grand Rapids investors should be fully aware that your tenants are the gears that keep the BRRRR method turning. Therefore, you should have a system in place that you never veer from following, wherein you vet your tenants to the best of your ability, including your screening process and making the calls to references to ensure the accuracy of the information provided on the application. It is also imperative that you are entirely within the letter of the local, state, and federal laws which govern your advertising and processing of potential tenants. Working with the right team, like the team at Respected Home Sales who can help you with the tenant process, can make all of the difference in your success.
Now that you have built equity through rehabilitating the property and show you have steady payments coming in from your tenants, the next thing Grand Rapids investors should know about in the BRRRR method is that it is time to pull the cash out of the property. Taking out 80 percent of the value, or an 80 percent loan to value ratio (LTV), which most lenders allow because you will have a healthy amount of equity remaining in the property. Let professionals like the investors at Respected Home Sales help guide you through the maze of financing options.
Once you have settled your finances, the next step Grand Rapids for investors using the BRRRR method is to repeat the process. While it may sound simple, it is clear that working alongside a reliable and experienced team with enthusiasm for rehabilitating Grand Rapids real estate can save you from making costly mistakes with your time and money. So instead of figuring everything out for yourself, why not work with professionals like those at Respected Home Sales who live and work full-time here in Grand Rapids, helping investors like you achieve their goals every day.
Why wait another day? Call today and find out how our vast network of the best in the business that Respected Home Sales has built up over the years in Grand Rapids can benefit you!
From locating properties, rehabbing, and even managing your holdings, Respected Home Sales can help make your dreams of retiring on your terms come true. You will be gaining the inside scoop on hot deals that are off-market, and at Respected Home Sales, we are keeping our investors apprised of upcoming changes in the market. Working beside the professional investors at Respected Home Sales makes investing in Grand Rapids real estate easy. And don’t forget to ask about our current inventory of the best investment property available in Grand Rapids. Contact Respected Home Sales at 786-808-1099.