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Flipping Homes in Canada with the BRRR Method: A Step-by-Step Guide
January 30, 2023 | Posted by: Matt Broom-Hall
Flipping Homes in Canada with the BRRR Method: A Step-by-Step Guide
The BRRRR method, or 'Buy, Renovate, Rent, Refinance,' is a popular strategy for flipping homes that allows investors to generate cash flow while also building equity in a property. Here's a step-by-step guide on how to use the BRRR method to flip a home.
Step 1: Buy a property
The first step in the BRRR method is to find a property that is undervalued and in need of repairs. This could be a fixer-upper, a foreclosed property, or even a property that is currently occupied by a tenant. The key is to find a property that can be purchased at a discount and that has the potential to generate cash flow after the repairs are completed.
Step 2: Renovate the property
Once you've found a property, the next step is to make the necessary repairs and improvements. This could include things like updating the kitchen and bathrooms, repainting, and replacing flooring. The goal is to bring the property up to market standards so that it can be rented out for top-dollar.
Step 3: Rent the property
After the repairs are completed, the next step is to find a tenant and begin collecting rent. The cash flow from the rent can help to offset the cost of the repairs and the mortgage payments. Additionally, by renting the property out, you'll be building equity in the property as the tenant will be paying down the mortgage.
Step 4: Refinance the property
The final step in the BRRR method is to refinance the property. This means replacing the current mortgage with a new one, typically at a lower interest rate. By refinancing the property, you'll be able to pull out the equity that you've built up through the rent payments and use it to invest in another property.
The BRRR method can be a great way to flip a home and generate cash flow while also building equity. It's important to remember that the key to success with this method is to find a property that can be purchased at a discount and that has the potential to generate cash flow after the repairs are completed. By following these steps, you can use the BRRR method to build a profitable and sustainable real estate business.
It's also important to note that flipping homes is a business, and it's important to have a solid plan and a good understanding of the local real estate market. It's always a good idea to consult with a legal and financial advisor before starting this kind of business.