BRRR . . . . Sounds like something we Texans would say upon arriving in Alaska!
Ok. Enough of my corny jokes.
BRRR is a tried and true method of investing and acquiring properties. Some investors are content to rest in this space the duration of their investing careers.
I like the BRRR Method of investing and here is why. It' a way to #CreateYourOwnEconomy in real estate investing and change the perception of gentrification:
What does the BRRR acronym stand for?
Buy, Renovate, Rent, Refinance, and Repeat.
It works by maximizing the efficiency of the capital in the deal and completing the stages listed above in a sequence that best maximizes each stage. Essentially, you or your company/team buy a distressed property, rehab it,
refinance it to recover the capital invested, and repeat.
There are a couple of ways to accomplish this,
Form a business entity. The structure can for for profit or a 501c3. Both structures offer different benefits and protections and either can work well. Would you like to discuss the matter more? Just click here.
Decide how you will fund the deal. I am a proponent of minimizing debt. However, there are a plethora of ways to fund a deal, i.e. self-directed IRAs, retirements, HELOCs, credit cards, life insurance policies, joint venture (form an LLP), angel investors/crowd funding, grants, and loans.
Gather your leadership team and devise the right strategy. HOW you buy the property is as important as how you exit ownership. You are essentially positioning the sell at purchase. In other words, you buy the property with your exit strategy in mind. Therefore, I highly recommend you have a team consisting of the following professionals: a real estate investing strategist, real estate attorney, CPA and tax professional proficient with investing transactions, banker or lender, realtor (when needed), inspector, and general contractor.
Start the search for the right property. There are a ton of ways to access properties. The MLS is the most traditional but rarely has the deals and profit margins that make investing lucrative. You can also search Craig's List, attend tax sale auctions, or scout neighborhoods in what is known as driving for dollars. However, we can assist you with compiling lists of properties that are pre-foreclosures, tax liens and deeds, vacant properties, and more. Simply submit a request for those lists and our MoguLife Support Team with compile them for you, reducing your search duration and expediting your process to the next step.
There is another use for the BRRR Method; it's the matter of gentrification. What is gentrification? Wikipedia states, "Gentrification is a process of changing the character of a neighborhood through the influx of more affluent residents and businesses. This is a common and controversial topic in politics and in urban planning". Development and improvement of our urban areas are needed, and I think there is a way to be profitable while maintaining the culture and history of our urban areas.
Here is a suggestion.
Form a CDC (Community Development Corporation), applying for grants, securing angel investors, and "shares" from members of the
CDC and begin buying multi-family projects, land, and commercial spaces. Consider this as a method to grow your organizations and businesses now. THIS IS HOW YOU TRANSFORM COMMUNITIES AND ECONOMIES.
Humanity does not have to succumb to profitability.
With the right strategy in play, both can happen and create win-win scenarios for those involved.