There are many formulas that real estate investors can use as a guide when considering an investment to ensure that their investment is sound. BRRRR is an abbreviation for one of the many methods investors use as a strategy for building their portfolio, buying, renovating, renting, refinancing, and then repeating the process.
This method of buying and holding investment properties will help you create a healthy portfolio with solid cash flow that will build wealth and provide you with a generous passive income in your retirement. So read on as we explore what Conway investors should know about the BRRRR method.
Buying
The first thing Conway investors should know about the BRRRR method is to focus on properties below-market price, allowing room for more profit immediately as well as down the road through appreciation. Unless you have a background in construction and home repairs, it is best to hire industry professionals. Don’t try and skimp on this step as this will lead to headache and pain down the road and possibly ruin everything you are trying to build to for the future. Clear Property Management LLC has several licensed and insured vendors that specialize in all sorts of repairs needed for your BRRRR. This phase of the BRRRR method is where your team-building skills come into play. A good team allows you to move quickly, assess the property, and have reliable data in hand to make an offer. Being the first to make an offer can often make the difference in being the early bird that gets its worm. Using the BRRRR method is easier when working with experienced investors like the pros at Clear Property Management LLC. Our full-service team of the industry’s most highly regarded service providers is ready to jump into action for you.
Budgeting
Another thing that Conway investors should know about the BRRRR method, once you have inspected the property and determined your costs and the after repair value, ARV, the purchase price should be no more than 70 percent of the ARV for the BRRRR method to provide the best returns. Of course this is just a baseline percentage but a good rule of thumb to start out by. When factoring in your budget, don’t forget the holding period during which you will carry the costs to own the property before you can begin to collect rent. Also remember, this is a rental, not your primary residence, so stick to making needed repairs and only necessary upgrades. Don’t forget to budget for unexpected repairs as this will all but be a guarantee down the road even with a full rehabbed property. Professional investors like those on the team at Clear Property Management LLC understand everything Conway investors should know about the BRRRR method. At Clear Property Management LLC, we are passionate about improving our community while helping you to build your real estate empire.
Tenants
Conway investors should be fully aware that your tenants are the gears that keep the BRRRR method turning. Therefore, a very important step to consider is having a system in place that you never veer from following, wherein you vet your tenants to the best of your ability, including your screening process and making the calls to references to ensure the accuracy of the information provided on the application. Don’t skip this! It is also imperative that you are entirely within the letter of the local, state, and federal laws which govern your advertising and processing of potential tenants so you don’t have legal action on your vetting process. An experience property management team at Clear Property Management LLC who can help you with the tenant process, can make all of the difference in your success with your Conway home.
Refinancing
Now that you have built equity through rehabilitating the property and show you have steady payments coming in from your tenants, the next thing Conway investors should know about in the BRRRR method is that it is time to pull the cash out of the property. This ensures that you have an infinite return on your investment as all your money invested is back in your bank account. A good standard for banking is taking out 80 percent of the value, or an 80 percent loan to value ratio (LTV), because you will have a healthy amount of equity remaining in the property. Let professionals like the investors at Clear Property Management LLC help guide you through the maze of financing options and get you in touch with local banks to help with this process.
Repeat
Once you have settled your finances, the next step Conway area investors using the BRRRR method is to repeat the process. While it may sound simple, it is clear that working alongside a reliable and experienced team with enthusiasm for rehabilitating Conway real estate can save you from making costly mistakes with your time and money. Instead of figuring everything out for yourself, why not work with professionals like those at Clear Property Management LLC who live and work full-time here in Conway? We are already helping investors like you achieve their goals every day.
Why wait another day? Call today and find out how our vast network of the best in the business that Clear Property Management LLC has built up over the years in Conway can benefit you!
From locating properties, rehabbing, and even providing property management, Clear Property Management LLC can help make your dreams of retiring on your terms come true. You will be gaining the inside scoop on hot deals that are off-market, and at Clear Property Management LLC, we are keeping our investors apprised of upcoming changes in the market. Working beside the professional investors at Clear Property Management LLC makes investing in Conway real estate easy. And don’t forget to ask about our current inventory of the best investment property available in Conway. Contact Clear Property Management LLC at 501-642-0202.