Real Estate Investor Uses BRRRR Method and Receives a 39.8% Cash-on-Cash Return
What is the BRRRR Method?
The BRRRR Method means “buy, rehab, rent, refinance, repeat,” and describes a strategy and framework used by investors who wish to build passive income over time.
The Scenario
An investor came to Rebuilt looking to:
Buy a House Using Someone Else’s Capital
Fix It Up
Rent It Out
Refinance It Into a Long-Term Loan
“If you do it right, you should gain a lot of value during the rehab stage which allows the bank to provide a loan which covers the short-term loan.”
The Results
After the investor received a short-term loan from a family member and updated the home in 5 weeks, he experienced the following results:
$76,500
Purchase Price
$25,000
Repair Budget
$127,000
Appraisal
38.9%
Cash on Cash Return
Before and After Images
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