All Forum Posts by: Desiree Rejeili

Real estate investing can be an effective way to build long-term wealth, and among the various strategies, one has gained significant popularity over the years: BRRRR. This acronym stands for Buy, Rehab, Rent, Refinance, and Repeat. It’s a strategy that allows investors to acquire rental properties with little to no money out of pocket while building equity along the way.

If you're considering using the BRRRR method to grow your real estate portfolio, here's everything you need to know about how it works, its benefits, and potential risks.

What is the BRRRR Strategy?

The BRRRR strategy is a systematic approach to real estate investing that revolves around five key steps:

1. Buy: Purchase a property, often below market value, that has potential for appreciation and improvement.
2. Rehab: Renovate the property to increase its value, make it livable, and improve its rental potential.
3. Rent: Find reliable tenants who will pay rent, allowing you to generate consistent cash flow.
4. Refinance: After the property is rehabbed and rented, refinance it to pull out the equity you’ve built through the renovation.
5. Repeat: Use the cash obtained from refinancing to fund your next investment property, starting the cycle again.

Step-by-Step Breakdown of the BRRRR Method

Let's take a closer look at each stage of the BRRRR strategy to see how it works in practice.

1. Buy: Finding the Right Property

The first step in the BRRRR method is to purchase a property. To make the strategy successful, you need to find a property that can be acquired below market value. Common sources of such properties include:

• Foreclosures: Homes that have been repossessed by banks due to non-payment.
• Distressed Properties: Homes that are in poor condition and need a lot of work.
• Auctions: Properties sold at auction for below market value.
• Off-market Deals: Properties that aren't listed on the MLS but are available for sale through direct outreach or networking.

The key is to buy a property at a price low enough to ensure that even after renovations, the home will appraise for a higher value.

2. Rehab: Adding Value Through Renovations

The rehabilitation phase is critical. This is where you can significantly increase the value of the property by making improvements that attract quality tenants and justify a higher rental price. Typical renovations include:

• Cosmetic Updates: Painting, flooring, kitchen and bathroom upgrades, and landscaping.
• Structural Repairs: Fixing any underlying issues such as foundation repairs, plumbing, or electrical updates.
• Efficiency Improvements: Adding energy-efficient windows, new HVAC systems, and better insulation to increase the property's overall value.

The goal of the rehab phase is to increase the property’s market value while making it an attractive place for tenants. By carefully managing the scope and cost of renovations, you can maximize the return on your investment.

3. Rent: Stabilizing the Property for Cash Flow

Once the property is rehabbed, the next step is to find tenants and begin generating rental income. A successful rental property should offer positive cash flow, meaning your rental income should exceed your monthly expenses (mortgage, taxes, insurance, maintenance, etc.).

To find the right tenants, ensure the property is priced competitively within the local rental market. It’s essential to screen tenants carefully to minimize vacancies and ensure reliable rent payments.

4. Refinance: Pulling Out Your Equity

Once the property is rehabbed and rented, you’ll likely have increased equity due to the value added through renovations. The refinance step is where you pull out this equity, typically in the form of a cash-out refinance.

Here’s how it works:

• You refinance the property at its new appraised value (after rehab and renting).
• You take out a new loan based on that increased value, ideally for the full amount or more than what you originally paid for the property.
• The goal is to pull out enough money to cover the cost of the original purchase and rehab (or even more, depending on the property’s appreciation).

This allows you to recover your initial investment, which can then be used to buy your next property.

5. Repeat: Scale Your Portfolio

The final step of the BRRRR strategy is to repeat the process. Use the cash you've pulled from refinancing to purchase your next property, and keep scaling your real estate portfolio. Over time, as you build more properties, the cash flow and equity from each one can be used to fund future investments, creating a cycle of growth.

Why BRRRR Works: The Benefits

The BRRRR strategy offers several benefits that make it appealing to investors:

1. Leverage Your Capital: The ability to pull out equity through refinancing means you don’t have to wait years to accumulate wealth. You’re able to leverage your initial investment and use it for future properties, potentially expanding your portfolio quickly.
2. Cash Flow: With each property, you can create a consistent cash flow stream that builds over time as rents increase and property values appreciate.
3. Wealth Building: By consistently following the BRRRR process, you're not just collecting rental income, but also building significant equity in each property. Over time, as property values increase, your wealth grows.
4. Tax Benefits: Rental properties offer tax advantages such as depreciation and mortgage interest deductions, which can help reduce your overall tax liability.
5. Scalability: Once you've mastered the BRRRR method, it becomes easier to replicate. The more properties you acquire and refinance, the greater your returns can be.

Potential Risks and Challenges

While the BRRRR strategy has great potential, it's not without its risks:

1. Unexpected Renovation Costs: While you may expect to rehab a property for a certain amount, surprises can arise, especially with older homes. Over-budgeting is critical to ensure that renovations don’t eat into your profits.
2. Market Fluctuations: If property values in your area do not appreciate as expected, or if you face a market downturn, the amount you can refinance for may be lower than anticipated.
3. Financing Challenges: Securing financing for the initial purchase and rehab, as well as refinancing after the property is rehabbed, may be challenging, particularly if the property is located in an area with fluctuating values or if the rehab work doesn’t immediately improve the property’s appraised value.
4. Tenant Risk: Rent collection and tenant management can be unpredictable. Vacancies, tenant turnover, or non-payment can impact cash flow and delay your plan.
5. Time and Effort: Managing multiple properties, handling rehabs, and dealing with tenants requires significant time, energy, and expertise. It's not a passive investment strategy, especially in the early stages.

Is BRRRR Right for You?

The BRRRR strategy can be an effective way to build a real estate portfolio, but it's important to go in with a clear plan. It's ideal for investors with some experience in real estate who are comfortable managing renovations and dealing with tenants.

If you're a beginner, you might want to start with a simpler buy-and-hold strategy or partner with experienced investors who can guide you through the BRRRR process. Proper research, budgeting, and a well-thought-out strategy are key to minimizing risks and maximizing returns.

In the end, BRRRR is an active investment strategy that, when executed correctly, can lead to long-term wealth creation, a steady stream of rental income, and a scalable real estate portfolio. So, if you're ready to roll up your sleeves and dive into the world of real estate, the BRRRR strategy might just be your ticket to success.

When it comes to managing your mortgage, most homeowners are familiar with refinancing as a way to lower monthly payments or take advantage of better interest rates. But there’s another option that’s often overlooked: mortgage recasting. This lesser-known strategy could help you save money and reduce your monthly payments without the hassle and cost of refinancing. Here, we’ll break down what mortgage recasting is, how it works, and who can benefit from it.

What Is Mortgage Recasting?

Mortgage recasting, also known as re-amortization, is a process that allows homeowners to lower their monthly mortgage payments by applying a lump sum toward their principal balance. Unlike refinancing, which involves taking out a new loan, recasting keeps your existing loan terms—including your interest rate and loan duration—intact. By reducing the principal balance, your lender recalculates your monthly payment based on the new, lower balance.

How Does Mortgage Recasting Work?

1. Eligibility: Not all loans are eligible for recasting. Typically, conventional loans backed by Fannie Mae or Freddie Mac are eligible, while government-backed loans like FHA or VA loans often are not. It's also important to check with your lender to see if they offer this option.

2. Lump Sum Payment: You’ll need to make a significant lump sum payment toward your mortgage principal. The exact amount varies by lender but is usually around $5,000 or more.

3. Recalculation: After you make the lump sum payment, your lender will recalculate your monthly payments based on the reduced principal balance. The interest rate and loan term remain unchanged.

4. Fees: Most lenders charge a fee for recasting, typically ranging from $100 to $500. This is much lower than the costs associated with refinancing.

Benefits of Mortgage Recasting

• Lower Monthly Payments: The most immediate benefit is a reduced monthly payment, which can free up cash for other financial goals.

• Save on Interest: By reducing your principal balance, you’ll pay less interest over the life of the loan, potentially saving thousands of dollars.

• No Credit Check or Appraisal: Unlike refinancing, recasting doesn’t require a credit check, income verification, or home appraisal, making it a quicker and simpler process.

• Keep Your Current Interest Rate: If you have a favorable interest rate on your current loan, recasting allows you to maintain it while still lowering your payments.

Drawbacks of Mortgage Recasting

• Requires a Lump Sum: Not everyone has the cash on hand to make a significant lump sum payment, which can make recasting inaccessible for some homeowners.

• Doesn’t Shorten Loan Term: While your monthly payments are lower, recasting doesn’t reduce the length of your loan. If paying off your mortgage early is a priority, recasting might not be the best option.

• Not Available for All Loans: As mentioned earlier, government-backed loans are generally ineligible for recasting, and not all lenders offer this option.

Who Should Consider Mortgage Recasting?

Mortgage recasting is a great option for homeowners who:

• Have received a windfall, such as a bonus, inheritance, or proceeds from selling another property.
• Want to lower their monthly payments without extending their loan term or going through the hassle of refinancing.
• Are satisfied with their current interest rate and loan terms.

How to Get Started

If you’re considering mortgage recasting, here are the steps to take:

1. Contact Your Lender: Ask if they offer mortgage recasting and confirm your loan’s eligibility.
2. Determine the Lump Sum Amount: Decide how much you can afford to put toward your principal.
3. Calculate Potential Savings: Use an online mortgage calculator or consult with your lender to estimate your new monthly payment and total savings.
4. Submit the Request: Once you’ve made the lump sum payment, your lender will process the recasting and provide a new payment schedule.

Final Thoughts

Mortgage recasting can be a powerful tool for homeowners looking to reduce their monthly payments and save on interest without the cost and complexity of refinancing. However, it’s not the right choice for everyone. Be sure to weigh the pros and cons, and consult with your lender or financial advisor to determine if recasting aligns with your financial goals. If you have the cash to make a lump sum payment and are happy with your current loan terms, recasting could be a smart move to improve your financial flexibility.

Thinking about buying a home? Here’s why 2025 might be your year:

💡 1. Building Wealth: Owning a home helps you invest in your future! Every mortgage payment builds equity—turning your home into a financial asset. 🏠📈

📉 2. Stability Amid Change: While the economy and markets fluctuate, real estate remains a long-term investment that historically appreciates in value.

🛠️ 3. Customization: Say goodbye to landlord restrictions! Owning a home means your space, your rules—paint that wall, design your dream garden, or create your perfect home office. 🎨🌱💻

🔒 4. Predictable Payments: Unlike rising rents, a fixed-rate mortgage locks in your monthly housing costs—giving you peace of mind and financial predictability.

📍 5. Location is Key: 2025 is bringing new developments and emerging neighborhoods—meaning there’s likely a spot that fits your budget and lifestyle. 🚦✨

👀 6. Opportunities in the Market: Whether it’s first-time buyer incentives, lower interest rates, or more inventory, the market is full of possibilities waiting for you to explore.

Ready to take the first step? Let’s talk about how homeownership can be part of your 2025 goals! 🏡💼

There’s no doubt that owning a home comes with significant financial benefits. And this time of year is a great time to reflect on the other reasons why owning a home is so meaningful.

A house is more than four walls and a roof – it’s a place where memories are made, connections are built, and life happens.

From the sense of accomplishment that comes with owning your own home to the joy of creating a space that’s uniquely yours, the emotional connections we have to our homes can be just as important as the financial ones.

Here are some of the things that turn a house into a happy home.

1. It’s an Accomplishment You Can Be Proud Of

Buying a home is a significant milestone, whether it’s your first or your fifth. You’ve worked hard to make it happen and achieving this goal is a reason to celebrate. There’s nothing quite like stepping through the door of a home that’s yours and knowing you’ve accomplished something truly special.

2. It’s a Place You Can Call Your Own

Compared to renting, owning a home can give you a much greater sense of security and privacy. It’s your own place – not your landlord’s – and that just feels different. No one else has the keys but you and that gives you your own personal safe place to retreat to at the end of a long day.

3. It’s a Space That’s Yours To Customize

Owning a home means you have the freedom to personalize it however you like. While there can be HOA guidelines you may have to follow depending on where you buy, you can still make it a reflection of your style and create a space that feels just right for you. As Freddie Mac explains:

4. It’s a Foundation for Building a Sense of Community

Homeownership often means putting down roots in a neighborhood and becoming a part of the local community. According to groups like , owning a home increases your interest in getting involved with your neighbors and local organizations. Whether it’s through joining a neighborhood group, volunteering, or simply getting to know the people next door, a home is a great foundation for building meaningful connections.

Bottom Line

Owning a home is about so much more than financial benefits – it’s about the pride, well-being, and sense of belonging it can bring. When you’re ready to take the next step toward buying a home, connect with a local real estate agent.

There’s one essential step in the homebuying process you may not know a whole lot about and that’s pre-approval. Here’s a rundown of what it is and why it’s so important right now.

What Is Pre-Approval?

Pre-approval is like getting a green light from a lender. It lets you know how much they’re willing to let you borrow for a home. To determine that number, a lender looks at your financial history. According to Realtor.com, these are some of the documents a lender may ask you for during this process:

• W-2s from the last two years
• Tax returns from the last two years
• Pay stubs from the last 30 days
• Bank statements from the last 60 days
• Investment account statements (if applicable)
• Two years of history of where you’ve lived

The result? You’ll get a pre-approval letter showing what you can borrow. Keep in mind, that any changes in your finances can affect your pre-approval status. So, after you receive your letter, avoid switching jobs, applying for new credit cards or other loans, or taking out large sums of money from your savings.

How It Helps You Determine Your Borrowing Power

This year, home prices are expected to rise in most places and mortgage rates are still showing some volatility. So, since affordability is still tight, it’s a good idea to talk to a lender about your home loan options and how today’s changing mortgage rates will impact your future monthly payment.

The pre-approval process is the perfect time for that. Because it determines the maximum amount you can borrow, pre-approval also helps you figure out your budget. You should use this information to tailor your home search to what you’re actually comfortable with as far as a monthly mortgage payment. That way, you don’t fall in love with a house that’s out of your comfort zone.

How It Helps You Stand Out

Once you find a home you want to put an offer on, pre-approval has another big perk. It not only makes your offer stronger, it shows sellers you’ve already undergone a credit and financial check.

When a seller sees you as a serious buyer, they may be more attracted to your offer because it seems more likely to go through. As Greg McBride, Chief Financial Analyst at Bankrate, says:

Bottom Line

If you’re planning on buying a home, getting pre-approved for a mortgage should be one of the first things on your to-do list. Not only will it give you a better understanding of your borrowing power, it can put you in the best position possible to make a strong offer when you find a home you love. Connect with a trusted lender to learn more.

Are you hesitant to sell your house because you’re worried no one’s buying with rates and prices where they are right now? Here’s some perspective that can help.

The market actually isn’t at a standstill. While there weren’t as many sales last year as there’d be in a normal market, roughly 4.15 million homes still sold (not including new construction), according to the National Association of Realtors (NAR). And the expectation is that number will rise in 2025. That means more people will likely move this year, and they need homes to buy. Homes like yours.

But even if we only match last year’s sales pace, here’s what that looks like.

Every Minute Homes Are Selling – Literally

• 4.15 million homes ÷ 365 days in a year = 11,370 homes sell each day
• 11,370 homes ÷ 24 hours in a day = 474 homes sell per hour
• 474 homes ÷ 60 minutes = roughly 8 homes sell every minute

Think about that. Just in the time it took you to read this, 8 homes sold.

If you’ve been holding off on selling your house because you think buyers aren’t out there, let this reassure you – there are still buyers looking to buy.

Every day, thousands of people need to buy homes. So, while higher home prices and mortgage rates have slowed the market down and forced some buyers onto the sidelines, that doesn’t mean the market isn’t active. Many buyers are still eager to make a move because life doesn’t wait for perfect market conditions.

With the right agent by your side, you can get your house in front of those buyers while other hesitant homeowners are still putting their plans on pause because they’re worried buyer demand has disappeared. Let’s get your house sold.

Bottom Line

On average, 11,000 homes sell every day, and yours could be one of them. In the time it took you to read this, another 8 homes sold.

When you’re ready to take the next step, connect with a trusted local real estate agent so you have an agent to create that perfect strategy.

Have you ever stopped to think about how much wealth you’ve built up just from being a homeowner? As home values rise, so does your net worth. And, if you’ve been in your house for a few years (or longer), there’s a good chance you’re sitting on a pile of equity — maybe even more than you realize.

What Is Home Equity?

Home equity is the difference between what your house is worth and what you owe on your mortgage. For example, if your house is worth $500,000 and you still owe $200,000 on your home loan, you have $300,000 in equity. It’s essentially the wealth you’ve built through homeownership. Right now, homeowners across the country are seeing record amounts of equity.

According to Intercontinental Exchange (ICE), the average homeowner with a mortgage has $319,000 in home equity.

Why Have Homeowners Gained So Much Equity?

The rise in home equity over the years can be credited to two key factors:

1. Significant Home Price Growth

Home prices have climbed dramatically in recent years. In fact, according to the Federal Housing Finance Agency (FHFA), over the past five years, home prices nationwide have risen by 57.4% (see map below):

This appreciation means your house is likely worth much more now than when you first bought it.

2. Longer Tenure in Homes

Data from the National Association of Realtors (NAR) shows people are staying in their homes for a decade (see graph below):

This increased tenure means homeowners benefit even more from home values growing over time. That’s because the longer someone has lived in their house, the more that home’s value has grown, which directly increases equity.

And if you're one of those people who's been in their home for 10 years or more, know this – according to NAR:

The Benefits of Having Home Equity

What does that mean for you? It means your house might be your biggest financial asset — and it could open up some exciting opportunities for your future. Let’s break it down.

• Moving to Your Next Home

Your equity could help you cover the down payment for your next home. In some cases, it might even mean you can buy your next house all cash.

• Financing Home Improvements

Thinking about upgrading your kitchen, adding a home office, or tackling other projects? Your equity can provide the funds to make those improvements happen, increasing your home’s value and making it more enjoyable to live in too.

• Getting a Business Going

If you’ve been dreaming about starting your own business, your equity could be the kickstart you need. Whether it’s for startup costs, equipment, or marketing, leveraging your home’s value can help bring your entrepreneurial goals to life.

Bottom Line

Whether you’re thinking about selling, upgrading, or simply want to understand your options, your home equity is a powerful resource. If you’re wondering how much equity you’ve built or how you can use it to meet your goals, connect with a local real estate agent to explore the possibilities.

Let’s face it – life can throw some curveballs. Whether it’s a job loss, unexpected bills, or a natural disaster, financial struggles can happen to anyone. But here’s the good news. If you’re a homeowner feeling the squeeze, there’s a lifeline that many people don’t realize is still available: mortgage forbearance.

What Is Mortgage Forbearance?

As Bankrate explains:

A common misconception is that forbearance was only accessible during the COVID-19 pandemic. While it did play a significant role in helping homeowners through that crisis, what many people don’t know is that forbearance is still a tool to support borrowers in times of need. Today, it remains a vital option to help homeowners in certain circumstances avoid delinquency and, ultimately, foreclosure.

The Current State of Mortgage Forbearance

Forbearance continues to serve as a valuable safety net for homeowners facing temporary financial challenges. While the overall rate of forbearance has seen a slight increase recently, it’s important to understand what’s driving this change and how it fits into the broader picture.

According to Marina Walsh, VP of Industry Analysis at the Mortgage Bankers Association (MBA):

This may seem concerning at first glance, but let’s break it down. The graph below, going all the way back to 2020, puts things into perspective:

While the share of mortgages in forbearance has significantly declined since its peak in mid-2020, there has been a slight but notable increase in recent months. This uptick is largely tied to the effects of two recent hurricanes — Helene and Milton.

Natural disasters like these often create temporary financial hardships for homeowners, making forbearance a crucial safety net during recovery. In fact, 46% of borrowers in forbearance today natural disasters as the reason for their financial struggles.

Even with the most recent uptick, the share of mortgages in forbearance is nowhere near pandemic levels, and, thankfully, reflects a very small portion of homeowners overall.

Why Forbearance Matters

Forbearance can help borrowers avoid the spiral of missed payments and foreclosure. It provides breathing room to address challenges and plan next steps. And while most homeowners today are not in a position to need forbearance, thanks to strong equity and foundations of the current housing market, it is an option for the few who do need it.

If you or a homeowner you know is facing financial difficulties, the first step is to contact your mortgage lender. They can walk you through the forbearance process and help you understand your options. Keep in mind that forbearance is not automatic — you need to apply and discuss the terms with your lender.

Bottom Line

In tough times, knowing your options can bring peace of mind. Forbearance isn’t just a financial tool — it’s a lifeline. And while the recent increase in forbearance rates might make headlines that give you pause, the truth is this option is working exactly as it should: helping those who need it most get through difficult moments without losing their homes.

Thank you so much for your kind words! I'm so glad you found the post helpful.

To answer your question, yes, certain types of homes and markets definitely tend to benefit more from full-service staging. For example, in higher-end or luxury markets, where the price point is much higher, full-service staging can be a game-changer. It helps create an aspirational experience and can make the home stand out in a competitive market. Similarly, homes that have unusual layouts or less traditional features often benefit from full staging, as it helps buyers envision how the space can work for them.

That said, even in more budget-conscious markets, full-service staging can still provide a significant return on investment, especially if the home has been on the market for a while or if it's empty and lacks warmth. Ultimately, it's all about the right balance—staging should always be tailored to the home and the market it’s in, which is where working with a knowledgeable agent really makes a difference.

Would love to hear your thoughts as well!

Knowing what to budget for when buying a home may feel intimidating — but it doesn’t have to be. By understanding the costs you may encounter upfront, you can take control of the process.

Here are just a few things experts say you should be thinking about as you plan ahead.

1. Down Payment

Saving for your down payment is likely top of mind. B

ut how much do you really need? A common misconception is that you have to put down 20% of the purchase price. But that’s not necessarily the case. Unless it’s specified by your loan type or lender, you don’t have to. There are some home loan options that require as little as 3.5% or even 0% down. An article from The Mortgage Reports explains:

A trusted lender will go over the various loan types with you, any down payment requirements on those, and down payment assistance programs you may qualify for. The more you know ahead of time, the easier the process will be. And the key to getting the information you need is working with a pro to see what’ll work best for your situation.

2. Closing Costs

Make sure you also budget for closing costs, which are a collection of fees and payments made to the various parties involved in your transaction. Bankrate explains:

When it comes to closing costs, a trusted lender can guide you through specifics and answer any questions you may have. They can also give you a better idea of how much you should be prepared to pay so you can cruise through your closing with confidence.

And as you plan ahead for closing day, be sure to budget for your real estate agent’s professional service fee too, in case the seller doesn’t cover it. But don’t worry, you’ll work with your agent ahead of time to agree on what this is, so you won’t be surprised at the finish line.

3. Earnest Money Deposit

And if you want to cover all your bases, you can also consider saving for an earnest money deposit (EMD). According to Realtor.com, EMD is typically between 1% and 2% of the total home price and is money you pay as a show of good faith when you make an offer on a house.

But, it’s not an added expense. Instead, it works like a credit and goes toward some of your upfront costs. You’re simply using some of the money you’ve already saved for your purchase to show the seller you’re committed and serious about buying their house. Realtor.com describes how it works as part of your sale:

Keep in mind, this isn’t required, and it doesn’t guarantee your offer will be accepted. It’s important to work with a real estate advisor to understand what’s best for your situation and any specific requirements in your local area. They’ll advise you on what moves you should make so you can make the best possible decisions throughout the buying process.

Bottom Line

The key to a successful homebuying savings strategy? Being informed about what you need to save for. Because, when you understand what to expect, you can plan ahead. With an expert agent and a trusted lender, you’ll have the information you need to move forward with confidence.

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