Category: Real Estate

Have you heard the acronym BRRRR? You may have heard this from someone when talking about land and property. In the world of real estate, you will likely encounter this word countless times, especially if you’re planning to get an education in real estate investing. Buy, rehab, rent, refinance, repeat, or BRRRR for short, is sometimes called the smart investor’s investment cycle. This is a common and conventional way of purchasing lease properties. Buying a property with finance (mortgage), rehabbing it, renting, and repeating the same process. 

The most traditional way of buying properties is with the help of some loans, usually from lenders or a bank. You’ll need to have a down payment, pretty stressful, right? However, through this investing method buying homes has never been more straightforward. Rehabbing can add value, renting can help you generate more income and cash flow, to have a better and secure financial position, and the process can be repeated many times over. In no time, you’ll be able to construct your portfolio in the real estate industry.

B stands for Buying. There are tons of techniques to help you in this section, including loan, seller financing, cash, short-term loan, and more. It depends on what option the investor will choose. Different initial funding can have different holding costs, benefits, and gains. The main point is that you have to guarantee that the capital won’t run out and that you can endlessly keep buying properties until you reach your financial goals. Whether or not you use a real estate broker for this stage is up to you. 

How can you do that? One rule is that you should never invest in more than seventy-five percent of the ARV or after repair value of a property. Secondly, it is vital to purchase properties that are under market price. Spending too much money on a property can negatively affect your recovery from unexpected problems and issues in the future.

Giving an entire make-over to the house can cost a lot. Make sure that rehabbing the property is done well, but at the same time ensure that you’ll be able to recover the money you’ve spent on it. Adding value, function, and making it livable are the three main things to remember in the rehab stage. You don’t want to end up spending money and then not being able to get it back. Properties that need lots of fixing are cheaper, and other investors probably won’t care about the property, but those are the ones you should be looking for. Because once you focus on these properties, you can add value or equity to your sales.

Once you’ve done the rehab stage, you can then start looking for renters. It’s good to get tenants who pay on time monthly since that will help pay the mortgage and generate income for your bank account. The renting phase can be one of the crucial parts of BRRRR. That helps the with the refinancing and the rest of the cycle.

As for your refinancing, some banks can help you borrow the estimated value for your BRRRR property. You can also ask investors, friends in the real estate industry, or online websites such as Popstream, Redfin, and many more. You want to be sure to give them clear and precise pieces of information on what you need, and they might be able to help you. 

Keep in mind that you want to get as high of an estimated amount or cost as possible. A perfect combination of how well the rehabbing stage went and how much income you are getting from your first renters plays a significant role in this. 

Getting prior approval for a loan is recommended before buying. Once all the buy, rehab, rent, refinance are all successful for the first property, you can go on and “repeat” the same process again. This part is the most exciting of all, getting to experience your early success. Taking in everything that you’ve learned through the process can be extremely helpful with your next BRRRR. By doing so, you can see which parts you need to improve on. 

Focus on building your systems. A system can help you accomplish your goals and objectives by repeating the same method again and again. It’s okay to make mistakes, but be sure to learn from it, and eventually, you’ll see that the strong foundation you will cut down on the unnecessary mistakes you make throughout the process. Take notes of everything and document it so that you can go back to it whenever you need to.

Buying a home is probably one of the largest investments you would make in life. In our contemporary world, owning a home would be described by many as an American dream. However, you shouldn’t be coerced into buying a home as it is a decision that requires self-scrutiny, critical thinking, and effective decision-making.

Buying a home is not a one-time decision and requires you to evaluate your position carefully and whether becoming a homeowner is a viable option. That said, here are some frequently asked questions by home buyers to guide your purchasing decision.

Is Buying Better Than Renting?

There are many benefits of buying a home that stands out from renting. First, being a homeowner guarantees your peace of mind and privacy. This way, you don’t have to deal with your noisy next-door neighbor or make changes to your apartment without consulting the landlord and acquiring permits.

It is also imperative to note that homeowners are subject to tax deductibles. This means that homeowners deduct mortgage payments and other house-related expenses such as property tax from their returns. This way, you can save on your taxes and invest the funds in your home or other ventures.

Owning a home is also a long-term investment given the ever-increasing land and property values. However, property values are subject to change due to market factors such as tax rates, location, infrastructure, and security. The land value will always appreciate even if the house value goes plummets.

Are You Ready to Buy?

Before you can make the final decision on purchasing a home, it’s essential to ask whether you’re making the right choice. Making the correct choice begins by evaluating your position and making an informed decision that’s fact-guided. Here are some pointers to help you determine whether you are ready to be a homeowner.

Finances

Check the state of your finances to determine whether you can afford to buy a house and handle related expenses. Do you have enough cash in your savings to make full or down payments on the house?

Even if you don’t have the full amount, ensure you can afford to pay for the upfront costs. It would be better if you also had a steady income or constant revenue source to finance your housing escapades or qualify for a mortgage.

Credit Score

Consider your credit rating, as this will determine whether you are eligible for a mortgage. Most lenders will check your credit to decide whether you can make repayments and the loan amount to disburse.

Debts

Check whether you have any outstanding debts that would hurt your credit rating. Thus, ensure that you make payments on your credit cards and clear any existing loans that you may have. This way, you can avoid straining yourself financially and be in a good position to qualify for a mortgage.

What Should I Consider When Buying a Home?

After an in-depth analysis of your finances and familiarizing yourself with the home buying process, your next move is to start house hunting. Here are some tips to help you find a suitable home.

Personal Needs

We all have a picture in our minds of how we want our future home to look. Thus, consider what you want in a home and what type of property fits your preferences. This decision may be driven by house features such as the number of bedrooms, bathrooms, yard size, and house design. Knowing what you want will be the focal point of finding the perfect home.

Cash or Realtor

Identify the benefits of buying the house directly with cash or going through a real estate agent. Weigh your options and know the difference each will bring in your house hunting.

Asking these essential questions helps you to avoid making simple but costly mistakes. Research more and find out what it takes to be an ideal homeowner.

 The world was shaken in early 2020 with the rapid spread of Covid-19. Businesses of all types had to close their doors, following safety guidelines for the pandemic, and shift to a “new normal” of remote work and limited access to nearly every aspect of economic life.

 The 2020 global market was volatile and unpredictable as a result, but the outlook for 2021 is much brighter. As the world adjusts to changes brought on by the pandemic, we will see the end of the financial recession, with overall growth and optimism in the global market.

 Late November 2020 saw about 12% growth in global equities since the beginning of the year. The announcement of effective vaccines and the end of the U.S. election led to a bullish market with record highs on the S&P 500 Index.

 This growth, along with government relief packages designed to boost the economy, has led us to an early post-recession phase, bringing with it conditions that will favor equity returns over bonds.

 We should also see low inflation and low-interest rate growth for an extended period as global economies rebound from 2020’s instability. The global market will likely show some signs of instability as reported virus cases escalate from time to time, but the overall 2021 financial trajectory is positive.

 We will see a decrease in the demand for technology stocks simply due to their rapid boost during the pandemic. However, the market will begin to turn to stocks with more cyclical value, bridging the gap.

 As more of the population receive vaccines, we will see a slow but steady pace of positive economic growth through the end of the year, resulting in possible GDP growth in excess of 5%. We’ll also begin to see businesses in travel and hospitality begin a pattern of a strong recovery in the latter half of the year.

 Real assets will show growth in 2021, too, despite the hit that retail and office properties took with 2020 shutdowns. Global real estate predictions show a return of over 6%, lower than the previously predicted 8%, but still showing positive growth.

 Natural resources will also see growth, even if lower than previously predicted, due to slow growth and increased scrutiny of overall environmental impact. Global infrastructure will also see an almost 6% return in 2021.

 Global oil demand will see slow growth, despite life beginning to return to pre-pandemic levels. In fact, demand is predicted to return to pre-Covid rates in mid-2022. OPEC is predicted to adhere to existing agreement terms, maintaining a deficit of 1.3 million barrels a day, which will result in a boost to Brent prices to nearly $70 per barrel.

 Emerging markets, including alternative currency, should see a big rebound in 2021, outpacing developed market equities and showing a gain as high as 20%. Bitcoin’s value will begin to steadily grow as corporate investors begin to take the plunge into the world of alternative currency, and it has already gained a strong foothold with millennials.

 Overall, while some predictions are down compared to extended predictions from pre-pandemic times, the global market will see a positive rebound, which may be a bit unsteady at first, but that will continue to strengthen toward year’s end.