The BRRRR Strategy with Emphasis on CASH FLOW
Using the BRRRR Strategy in the Niagara Region, we purchase a property that is undervalued, under-performing and generally not appealing to most buyers. We typically look for multi-unit properties,i.e. a duplex with the potential to add a 3rd unit, a triplex with the option to add a forth unit or a single family home on a larger lot that meets all requirements to add a legal basement unit (accessory suite) and turn it into a legal duplex. We don't really focus on "fixer uppers" but properties that need some TLC, ideally aesthetic upgrades and a few big ticket items that we would outsource, i.e. roof, some plumbing, some electrical work, lots of paint, siding, HVAC upgrades, etc. The potential to add a significant amount of value needs to be there, otherwise the chances of forcing equity appreciation in a short period of time are not great. The forced equity appreciation is crucial in order to pull the trigger on the 3rd "R", which stands for refinancing.
Once we take possession of the property, we already have our team of contractors lined up to renovate and improve the property as fast as possible.
Now that the property is renovated and looks great, we are going to attract good quality tenants for all the units, ensure all the tenants are "compatible" and rent for top dollar.
By the time the tenants have moved in and have made their first rent payments, we have a premium, top performing property. This strategy can be applied to many property types and it raises the value of your property very quickly. Another significant advantage is it will reduce long term maintenance and repair bills. Last but not least, it lowers your down payment after refinance. At this point the property gets reappraised and equity can be pulled out of the property, ideally the amount of equity should match the sum of funds paid for the renovations or more. These funds will be used as a down payment on the next investment property. In the meantime the rental income will cover all expenses and generate positive cash flow even when a flat amount of emergency funds will be set aside every month from the rental income.
Once we take possession of the property, we already have our team of contractors lined up to renovate and improve the property as fast as possible.
Now that the property is renovated and looks great, we are going to attract good quality tenants for all the units, ensure all the tenants are "compatible" and rent for top dollar.
By the time the tenants have moved in and have made their first rent payments, we have a premium, top performing property. This strategy can be applied to many property types and it raises the value of your property very quickly. Another significant advantage is it will reduce long term maintenance and repair bills. Last but not least, it lowers your down payment after refinance. At this point the property gets reappraised and equity can be pulled out of the property, ideally the amount of equity should match the sum of funds paid for the renovations or more. These funds will be used as a down payment on the next investment property. In the meantime the rental income will cover all expenses and generate positive cash flow even when a flat amount of emergency funds will be set aside every month from the rental income.
Short Term Rental Strategy (AirBnB/VRBO)
<div class="airbnb-embed-frame" data-id="53591005" data-view="home" style="width:450px;height:300px;margin:auto"><a href="https://www.airbnb.ca/rooms/53591005?guests=1&adults=1&s=66&source=embed_widget">View On Airbnb</a><a href="https://www.airbnb.ca/rooms/53591005?guests=1&adults=1&s=66&source=embed_widget" rel="nofollow">Grimsby Lakeview Suite</a><script async="" src="https://www.airbnb.ca/embeddable/airbnb_jssdk"></script></div>