Maximizing BRRRR Investments With Turnkey+ Services
The BRRRR strategy has long been a favored approach in real estate investing, known for its effectiveness and popularity.
This method involves:
Buying a distressed property
Renovating it to enhance its value
Renting it out to create a steady cash flow
Refinancing the property to extract equity
Repeating the process with subsequent properties
To carry out a successful BRRRR, investors must confidently identify promising deals in suitable locations. However, due to the shrinking inventory over the past decade, available discounts for buyers have become increasingly limited. This means that finding distressed properties at affordable prices, which can be renovated within a profitable budget, has become more challenging.
SHARE offers BRRRR investors our Turnkey+ services and tools to overcome these obstacles, enabling you to expand your portfolio seamlessly and efficiently.
✅ Provide a personalized evaluation for properties that align with your investment objectives
✅ Oversee renovations within your specified budget
✅ Facilitate tenant placement and professional property management post-renovation
✅ Offer centralized asset management, including annual tax assistance
✅ Support you with financing and refinancing options
Who Should Use The BRRRR Method?
- How much time and effort can you dedicate to the investment?
- How long are you able to afford to keep the property vacant?
- What is your appetite for additional risk in an otherwise relatively safe and stable investment?
- What are your long-term investment goals within the rental real estate space?
The BRRRR strategy, while highly effective, demands significant time, effort, and resources, making it more suitable for those with real estate experience. A crucial factor in determining the success of a BRRRR investment is the property's condition, and investors should carefully consider whether they can undertake the project. Choosing a property that requires moderate to extensive renovations will increase its value and attract potential renters. Additionally, it's essential to account for renovation costs, as the improvements will significantly contribute to the property's overall worth.
Possessing local market knowledge is vital for successful BRRRR investing. Understanding the nuances of the local real estate market allows investors to identify promising opportunities and make well-informed decisions. Familiarity with factors such as neighborhood growth, local economy, rental demand, and potential return on investment can significantly impact the success of a BRRRR strategy. Having a firm grasp of local market trends, future developments, and property values is essential for determining the viability of renovations and estimating the potential for long-term profitability.
Embarking on the BRRRR journey can be daunting but by leveraging SHARE's understanding of market trends and conditions, we can help you navigate the complexities of real estate investing and optimize your investment strategy. Our comprehensive service offering ensures you have the right tools and resources to confidently pursue BRRRR investments and scale your real estate portfolio effectively.
A Step-by-Step BRRRR Example With SHARE Turnkey+
Imagine you have saved ~$75,000 and want to pursue the BRRRR method under Investment Profile C. You can afford a ~$150,000 property and are targeting a 6% cap rate. As a local market expert, you find several options that appear to fit the criteria, and you narrow in on a distressed property in a C-rated neighborhood. To make the BRRRR work, if your post-renovation value is ~$300,000, you will need to renovate the property for ~$75,000 or less.
You bring your BRRRR property to SHARE, and with our Turnkey+ service, we help determine the necessary renovations to maximize the value and rental rate potential and assist with mortgage facilitation, including products that cover a portion of the renovation budget.
Once the property is closed, SHARE can collaborate with your third-party contractor to manage renovations, ensuring they stay within budget, or help with sourcing a contractor for the project.
In this example, you have invested a total of ~$75,000 in the property based on a 25% down payment – initial ~$50,000, inclusive of closing costs and mortgage-related expenses, and an additional ~$25,000 for the equity portion of the renovation budget and carrying costs during the renovation. If you have ~$130,000 saved, you can avoid an estimated $5,000 of extra costs and expenses related to financing of the renovations.
Once renovations are complete, SHARE works with a professional property management firm to screen high quality tenants and rent it out at the highest market rate. We take care of all operations on your behalf so you can reap the benefits of ownership without the landlord duties.
Once a tenant is in place, SHARE assists you in refinancing the property to extract equity. In this example, the property appraises for $300,000 post-renovation, allowing you to pull out ~$60,000 of equity if renovations were financed, or ~$110,000 if they were self-funded, compared to $75,000 or $130,000 invested, respectively.
Now that you've extracted equity from the property, you can use that money and the generated cash flow to invest in another property and repeat the process.
Investing with SHARE means you never have to navigate any of the steps alone.
Our mission is to provide a stress-free, low-risk, and stable real estate investing experience. The most challenging aspects - selecting the right market, evaluating properties, sourcing financing, budgeting, calculating ROI, renovating, tenanting, and ongoing property management - become more manageable and repeatable with our assistance. SHARE offers institutional-grade asset management to retail investors, whether you're a novice or a seasoned pro!
Like any investment, the BRRRR strategy involves extensive planning and execution. Although it's a powerful and proven approach for real estate investors, it can also be overwhelming. Utilize our service to eliminate the guesswork in property selection, and let us help you achieve your financial goals more effectively and efficiently. Schedule a no-commitment call with us today or send us an email so we can create a customized investment plan for you.