What is a wise BRRRR option?

[Rob Miles]

I am brand new to real estate and since I am - BRRRR sounds like an attractive strategy to me.

However my goal is to pay off properties so cash flow grows much greater when a loan is paid off.

Brandon Turner writes that BRRRR is ideally for the "long term flip" and not so much to hold on to a property until it is paid off.

So is it wise to combine my goal of holding on to a property to pay off a loan and reap the benefits of greater cash flow AND BRRRRing. Or should they be done separately (BRRRing to long term flip)?

[Kyle Shankin]

Hi @Rob Miles.

This question is somewhat subjective and depends on your goals. However, there really are a great number of benefits to refinance. For example, if you're looking to do many deals, one of the easiest forms of getting working capital is to leverage your existing properties via a refinance. Because you have more working capital, you can purchase more properties in less time. Also, your loans on the property (when handled correctly) are tax-deductible, paid off by your tenants and (with the seemingly natural rise of inflation), paid off with weaker dollars than you used to purchase/refinance the property with.

On the other side of the coin. If your rentals' cashflow pay for your entire lifestyle, and you have no interest in investing any further, then you could very well just go about your life.