What makes a good BRRRR property? What is it you should be looking for?
A good BRRRR property follows the 75% rule. But that’s not the only criteria you should follow. What else makes a good BRRRR property?
What to Look for in a BRRRR Property
Here are the factors successful BRRRR investors consider in their properties.
For multi-family or commercial tenants, lenders have different requirements. They often need you to hold your loan for 12 months after purchase (or even 12 after tenants move in). But that timeline doesn’t work well with the BRRRR method. You’ll have a much easier time with single-family homes.
“Knowing your numbers” also means knowing the rent prices in the area of a property. Cash won’t flow on your investment if you’re unable to charge enough rent.
Similarly, find properties people want to live in. If you wouldn’t want to spend time there, good renters probably won’t either.
If you’re doing vacation rentals, do the research on:
- What areas people want to visit
- What the rates are in the area
- What third-party booking sites would be most profitable
- What fix up levels you’ll need
- Whether there are good hosts or property managers in the area.
Don’t Rush into Bad BRRRR Properties
Beginners fail at BRRRR when they don’t choose properties wisely. Don’t just buy property to buy property. You can own ten bad rentals and make no money. BRRRR should be a system that builds cash flow.
We see people do one or two BRRRRs then stop because it’s not what they expected. They put too much money in, or the area isn’t good, or their renters aren’t paying, or the rent isn’t enough to generate cash flow.
In short, these issues aren’t BRRRR’s fault. A prepared investor, beginner or experienced, can always succeed with BRRRR properties.
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