BRR (Buy, Refurbish, Refinance) Property Strategy for 2024: Step-by-Step Guide by Liam Ryan

BRR…what is it, how does it work and how can you use it to launch and grow your property business without using any of your own money? Read on for more…

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If you’re on the lookout for a tried and tested property strategy that has stood the test of time, then you should consider BRR (Buy, Refurbish, Refinance). Considering the current economic uncertainty, having a robust strategy that works consistently is crucial. The BRR (Buy, Refurbish, Refinance) method is one of the most effective property strategies out there and the best part is, you don’t need to use any of your own money to get started. Before we take a deep dive into what the BRR property strategy has to offer and how you can use it to build your own property portfolio and achieve job-replacing income, let’s go into more detail about what it entails.

BRR (Buy, Refurbish, Refinance) Meaning

BRR stands for Buy, Refurbish and Refinance. It is a property investment technique that typically involves buying a property (usually a low-value one), enhancing it in order to increase its value e.g. by adding a new kitchen, bathroom or a giving it a basic makeover, and then refinancing the property for a high return on your initial investment. Often referred to as flips, the BRR strategy is a great way to build up a good pot of cash and start building your own property portfolio. While it is widely applied to buy-to-lets, it is also suitable for other methods including HMOs and commercial properties.

In this video, expert property investor and Assets for Life partner, Jamie York breaks down the basics of the BRR property strategy, sharing top tips on how you can make it work for you, whether you are just starting your property investment journey or are looking to grow an existing portfolio.

Let’s break down each step of this lucrative property strategy…

Buy

The first step when it comes to the BRR (Buy, Repurpose and Refinance) technique involves acquiring a property. You can do this by getting a bridging loan to fund the initial purchase. A bridging loan is a short-term funding used to finance the gap between buying a house and securing a mortgage. Ideally, the property you purchase will be low value, increasing your chances of a high return. Old homes or those in need of some TLC are ideal.

*At this stage, you’ll need to make sure that your numbers stack up and that you factor in the cost of refurbishments as well as other fees into your calculations.

Refurbish

Perhaps one of the most important steps in the BRR property strategy, the refurbishment stage plays a big part on your return on initial investment and can get quite complex depending on the size of the project that you are undertaking. For example, a home that requires a full home refurbishment will require a lot more time, planning and resources than one that needs a basic makeover. The good thing is, our intensive training and property mentor programmes are available to support you each and every step of the way.

Refinance

The refinance stage of the BRR strategy comes after the improvements on your property are complete. At this stage, you will have pushed up the property in value meaning that you can borrow (e.g. with a buy-to-let mortgage) based on the property’s new and improved market value. You are then able to pull your initial investment out which can be used on funding other properties.

“How does it all work?” you may be thinking. Here’s an example of how this may work with some realistic figures:

You buy a property at £90, 000 using a bridging loan. The property price in this case reflects the refurbishments needed to the property. Let’s then say those refurbishments total at £10, 000 and once complete, the property is now valued at £150, 000. You can now use the funds from the mortgage you secure to pay back the bridging loan, pay yourself back (if you have used any of your own money) and gain profit. You can repeat the process, again and again, using the pot of cash you now have. It’s that simple! It’s easy to see how this property strategy can be replicated in order to build a lucrative property portfolio.

Pros of the BRR property strategy

Low initial investment – low initial investment is required, usually the deposit along with any necessary fees, which can be funded using a bridging loan.

Potentially high returns – when well executed, the BRR property strategy can yield some high returns on your initial investment. The key is to know your numbers and make sure you factor in all costs before committing.

Great way to build a pot of cash – BBR allows you to get into property investment without needing huge savings, enabling you to start building a pot of cash quite quickly. This can then be used to fund other properties using the same technique and build a lucrative property portfolio.

Cons of the BRR property strategy

Hard work – the BRR strategy requires hard work, from sourcing below market value property that you can secure a bridging loan for, through to renovations and securing a mortgage. The process can be quite tedious.

Expertise required – there are many things to consider with the BRR strategy and you should be well-informed before starting your journey. Thankfully, our free property training helps equip you with everything you need to thrive in property business.

Some projects can become very complex – Due to the complexity of some BBR (Buy, Repurpose and Refinance) projects, it’s highly recommended that you are knowledgeable about the property space before committing and have a strong network of experienced property professionals.

Now that you have an in-depth understanding of the BRR strategy, what it consists of and how you can use it to generate wealth, you may be interested to learn more about a similar, popular property investment strategy (BRRRR) which can be found via the link below:

BRR (Buy, Refurbish, Refinance) Property Strategy Explained

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