Tips for Having conversations with Partners about Refinancing?

[Kobe McDaniel]

Hey BP,

What are some strategies you've used when talking with partners/family/others about refinancing a property as apart of the BRRRR strategy? Thanks

[Eric Kump]

Hey Kobe! I think the BRRRR acronym can be daunting for anyone that is unfamiliar with it. I think the best thing you can do is help them understand the 'why' behind using this method.

As I'm sure you know the BRRRR method is very popular because it helps increase the speed at which you can build your investment portfolio and investment income.

If I were explaining this to a family member I would compare the traditional way to invest in real estate vs. the BRRRR method.

Traditional- Buy an investment property, let the tenant pay the house principal down. Wait several years to buy an additional property because saving up for a home isn't cheap. If your goal is to own 10 homes, it could take you decades to get there.

On the flip side, through the BRRRR method you would buy the property, fix it up, rent it out, refinance the initial investment out of it and purchase another home with those funds. Instead of waiting several years this can be done much quicker because you have access to your down payment and funds to fix up the house much quicker. You could buy a home and refinance it within months. With interest rates as low as they are currently and homes growing rapidly in appreciation, there is a reason why so many have turned to this method.

I hope this helps! Let me know if you have any questions.