The BRRRR Strategy question

[Evan O'Brien]

Are you able to do the BRRRR strategy by only paying for properties with cash? Or can you also utilize this strategy with loans and putting a down payment on a property?

[Brian Kantor]

You certainly could take out a traditional mortgage to buy a property, renovate it and refinance it. With that said, cash is the more common first step because many properties with the most BRRRR potential are not in good enough condition for a bank to approve a traditional mortgage on in the first place. Also, you typically will get a better price with a cash-offer, so there will be more meat left on the bone for your BRRRR. That said, essentially anytime you pull enough equity out of your home to pay off all or most of your purchase price and use that cash to buy the next property, you're executing a BRRRR.