Using the Brrrr method to quickly add properties to your portfolio works well, but finding properties that make sense to Brrrr isn't that easy.
Let us show you how we do it in our business so you don't waste your time and money.
Read on to learn the different methods we use in our own business to find the best Brrrr properties to build a portfolio quickly. Learn how to confidently find profitable deals that will give you the best return on your investment.Back to top
What Makes a Property Good for BRRRR
When looking for properties that are good for the BRRRR strategy, it is important to consider location, price range, and condition. Location is key when it comes to finding a property that will be profitable with the BRRRR method. You want to find an area that has a strong rental demand with higher rents compared to the price of the homes. Additionally, you should look for properties that you can possibly purchase at a discount and still have enough money left over to cover the renovation costs. Finally, you should look for properties in need of some repairs or updates so that you can add value through renovations and increase your return on investment.
Things to consider for locations
1. Rent to Price Ratio: Appreciation is great but for keeping rentals its more important to look for homes with great rent to price ratios.
2. Price Range: You want to find properties that are priced below market value so that you can purchase them at a discount and still have enough money left over to cover the renovation costs.
Things to consider for property condition
1. Repairs and Updates: Look for properties that need some repairs or updates so that you can add value through renovations and increase your return on investment.
2. Structural Integrity: Make sure the property is structurally sound and doesn’t have any major issues that could be costly to repair.
3. Safety: Check for safety hazards such as mold, asbestos, lead paint, or other hazardous materials that could be dangerous to occupants.
4. Inspections: Have a professional inspector check the property before you purchase it to make sure there are no hidden issues that could cost you money down the line.
The main thing to keep in mind is that you want houses that you will be able to rent for more than the mortgage. The higher the rent to value the better. Your goal is to get the house at a low enough price that you can pull as most if not all your money back out of it once its rented.
To do that the value will need to be high but the rents will also need to be high compared to your loan. This makes this method a little more market specific than other methods. It's much harder to do the Brrrr method in high end markets. Those can often work better for pure flips.
Now that you have an idea of what to look for and where to look. It's time to start looking for those properties. Just like other investing methods, there are plenty of ways to find these properties. In fact, you can use just about any method you have seen on this site. That being said, there are a couple of methods that work particularly well for Brrrr and have other added benefits as well.
Key Takeaways: Utilizing the BRRRR strategy can help investors take advantage of low-cost entry points and potential high returns.Back to top
Best Methods to Find Brrrr Properties
As mentioned above, there are plenty of methods to find properties for investing. The methods here though work particularly well for Rentals.
Driving for Dollars
For finding rentals, nothing beats driving for dollars. At least when you are getting started. Not only does this allow you to find the most likely properties that owners might be willing to sell. It has a very important secondary benefit.
Driving the neighborhoods you are considering investing in will give you much more insight as to where you are buying. Because you are looking for properties in cheaper areas you have to be more careful when buying. Especially if you aren't interested in holding homes in what some might consider war zones.
Actively looking at the houses helps you get a feel for the area and put actual eyes on the houses. You are looking for homes in decent areas that need attention. Not homes that no one wants to live in because the neighborhood has gotten too bad. A boarded up house here in there is what you are looking for. Not boarded up houses everywhere.
This method gets a lot of attention for wholesalers and flippers but it also works great for Brrrr. Use your favorite list software or website and narrow your filters down to the areas you picked out. Now, look for absentee owners that have owned their properties for several years.
Filter out the LLC's and you have a great list of owners to contact. These are owners that are already renting the home out. This gives you some confidence that the house will work for Brrrr, since it's already a rental. It also works well because these sellers often can have more than one property and if you catch them at the right time they could be in a phase in their life where they are simplifying things and getting rid of their properties.
Another way to find properties for Brrrr investing is to get a copy of the eviction list from your county. This is done differently in each jurisdiction but once you get the list you will know which properties to put the most effort into getting ahold of the owner.
Just like before these are landlords (see a pattern) and houses that were rented before. They are more likely to be in the price range you want and if the current renters are getting evicted the owner of the house might be more open to selling.
Other Methods for finding Brrrr Properties
The above methods work great and help you narrow down your search for properties that are the most likely to fit your model. But they can be time consuming and once you start to get a few properties under your belt, you might want to up your game.
Driving for dollars takes a lot of time and although it can be scaled, it's harder to scale than other methods. There is also only so many evictions so your lists are fairly small. So here are a few more ways to find brrr properties. These will allow you a larger volume of properties to sift through but will also require a little more research on the back end.
- Online real estate platforms: There are several online platforms that allow investors to search for properties based on location, price, and other criteria. These platforms can be a good resource for finding distressed properties that are available at a discounted price.
- Wholesalers: Wholesalers are individuals or companies that specialize in finding and purchasing distressed properties at a discounted price. They often have a network of properties available and can be a good source of leads for investors looking for properties to invest in using the Brrrr method.
- Real estate agents: Real estate agents who specialize in working with investors can be a valuable resource for finding properties that are suitable for the Brrrr method. They may have access to off-market properties and can provide guidance on the local real estate market.
- Networking: Networking with other real estate investors and professionals can be a valuable way to find properties that are suitable for the Brrrr method. Attend real estate events, join investor groups, and connect with others in the industry to learn about potential opportunities.
- Foreclosures: Properties that are being sold through foreclosure can be a good opportunity for investors looking for properties to invest in using the Brrrr method. These properties are often available at a discounted price and may need significant renovations. However, it's important to carefully evaluate the condition of the property and the potential costs of renovations before making an offer.
Key takeaways: Research and due diligence are essential for finding the best BRRRR property deals that offer a good return on investment and fit within an investor's budget.Back to top
Contacting the Owners
Some of the methods are pretty easy to get your offer in. Real estate agents will likely be involved in foreclosures or the auction company will give direction on what to do. But in the other examples like driving for dollars or your eviction lists, you will need to contact the owners directly.
There are tons of ways to do this but basically, your list provider or software will give you the owner's name and address. Once you have that you have several options.
- Contact the listing agent: If the property is listed for sale with a real estate agent, you can contact the agent to express your interest and request more information about the property.
- Door Knocking: If you are really motivated to buy a house try knocking on the door. Make sure you are at the owner's house, not their rental or you won't be talking to the right person.
- Send a direct mail campaign: If you are unable to locate the owner or the property is not listed for sale, you can try sending a direct mail campaign to the property. This involves sending a letter or postcard to the property offering to purchase it. While this approach may not be successful in all cases, it can be an effective way to reach out to owners of off-market properties.
- Cold Calling: Have the owner's name and address then there is a good chance you can skip trace them for their phone number. Now you can call them directly.
Key takeaway: Contacting the listing agent, door knocking, sending a direct mail campaign, and cold calling are all methods for finding the owners of potential BRRRR properties.Back to top
Finding the best BRRRR property deals for your real estate investment strategy can be a great way to maximize your returns while minimizing your risk. With careful research and due diligence, investors can find properties that offer a good return on investment and are within their budget. By utilizing the BRRRR strategy, investors can take advantage of the low-cost entry-point and the potential for high returns. With the right strategy and a bit of patience, investors can easily find success with BRRRR property deals.Back to top
Q: What is a Brrrr Property?
A: A Brrrr Property is a real estate investment strategy that involves buying, rehabbing, renting and refinancing a property. The acronym stands for Buy, Rehab, Rent, Refinance, and Repeat. The goal of this strategy is to build equity in a property while creating a steady stream of income.
Q: What are some tips for finding the best Brrrr Property Deals?
A: Research the local real estate market to find properties that fit your criteria. Make sure you understand the financing options available to you, such as loans and grants. Consider working with a real estate agent or broker to find the best deals. Research the area to make sure the property is in an area with good rental demand. Finally, make sure you do your due diligence to ensure the property is a sound investment.
Q: What should I consider when evaluating a potential Brrrr Property?
A: When evaluating a potential Brrrr Property, consider factors such as the condition of the property, the rental potential, the cost of repairs, the financing options available, and the potential return on your investment. Additionally, consider the time and money required to complete the necessary repairs and renovations.