BRRRR Method- When Buying Cash

[Ithamar Duran Ramirez]

Hello all!

I’m a rookie to real estate investing. I am a licensed REALTOR in the state of Texas, but I’m barely approaching one year and haven’t really gotten my head around all the ins and outs.

How would the BRRRR Method work if I buy a house with private money?

Thanks in advance!

[Kenneth Garrett]

@Ithamar Duran Ramirez

First you should acquire David Greene's book on BRRRR and Brandon Turners book on Rental Property Investing. The private investor will be the first lien holder. You will have your attorney prepare a note and mortgage or deed of trust depending on your state to protect your investors funds. Are they funding the purchase and rehab?

Calculate what the rehab estimate will be. Add the that to the purchase. Try to figure what the ARV will be. Example purchase $100K, rehab $20K, ARV $160,000. At 80% LTV all your money is returned plus the investors money if all done in 3 or 4 months. Refinance may take 6-8 weeks. Make sure you understand the rental market and the property will cash flow after all expenses.