BRRRR IN DENVER

Buy. Rehab. Rent. Refinance. Repeat.

Looking to build your real estate portfolio as quickly as possible? The BRRRR method might be the right strategy for you!

It’s not necessarily easy, but if you or your realtor have a good pulse on the Denver market, and familiar with building and renovation costs, then there is an opportunity to build both equity and cash quickly.

The Benefits of the BRRRR

Buy. Rehab. Rent. Refinance. Repeat.

Build Wealth - By acquiring properties, adding value to them by rehabbing, collecting rental income and then refinancing to allow you to buy more properties you'll have a cash flowing portfolio of properties.
Access to Financing - The BRRRR method allows you to leverage financing to acquire properties and complete the rehab work. This means you can use other people's money to grow your real estate portfolio!
Control Over Investment - When you select the properties you want to buy, determine the extent to what you renovate, set the desired rent and manage your properties, you'll have the control to maximize the return on your investment.

Lower Risk - Properties that are prime for a BRRRR are usually sold at a discount, which allows you to minimize your upfront investment. And, since you're improving the property, it'll reduce the risk of costly repairs down the line.
Forced Appreciation- By rehabilitating the properties you can add value and force appreciation. This will allow you to generate equity and increase your net worth! This is what allows you to refinance quickly.
Long-Term Income - A bonus of the BRRRR method is you can increase your equity and portfolio quickly and at scale. But, since you're holding the properties you'll continue to benefit from the rental income long-term.

The Drawbacks and Risks to The BRRRR Strategy:

Rehab Risk – The cost of the rehab could be higher than anticipated, leading to a reduced ROI or even a loss on the investment.
Rental Risk - The rental income from the property may not be as expected, which can impact the overall profitability. Vacancy rates can also impact rental income, if a unit is vacant too long it can result in a financial loss.

Refinance Risk – The property may not meet the lender's requirements for refinancing. This could be due to a change in the lending requirements or the market value of the property.
Interest Rate Risk - Rates can impact the profitability of the investment. If rates rise, the cost of financing the property increases, which can reduce cash flow and impact the overall profitability of the investment.

Get Educated on The BRRRR Method:

Before you do anything, you should pick up David Greene’s book: Buy, Rehab, Rent, Refinance, Repeat.

The book alone is gold, but the bonus content is super valuable.

Listen to Podcasts from Invest2FI –

Some key episodes to tune into are:

Learn From Other’s on YouTube

Sam Primm has an awesome video that walks you through the refinance steps.

BRRRR CASE STUDY

Denver - Non-Conforming Duplex

5 Bed | 3 Bath
1,900 sq/ft
Purchase Price: $320,000
Cash Flow: $1,730/month
CoC Return: 19.77%
NWROI: 96.38%

Let's Dive Into How to Make it Happen!

Buy. First you have to land a deal that will work to BRRRR. You’ll need to get real with yourself about what renovations you can handle yourself, what you’ll need to hire out and confirm the total cost of repairs and renovations plus the purchase price don’t exceed 70% of the ARV (after repair value).

Rehab. This isn’t just a fix and flip rehab. Since you plan to keep and rent the property, you’ll be the landlord, so the decisions you make about renovating will pay off or haunt you later.

Rent. If you work with a FI Team agent, this part is easy. We’ll supply you with all the tools you need to get your property listed, rented and tons of tips to make sure you get a solid renter in your space – from a STR property to a long-term rental, we’ve got you covered.

Refinance. This is the fun part. Recapture as much equity from your property as possible.

Repeat. Congrats on getting here! Take notes of what worked well and what you can improve and modify your systems to improve efficiency. Then, do it again!

Ready to get started?