Is BRRRR Dead?

The real estate technique known as BRRRR used to be an incredible way to invest. It allowed investors to buy low, force appreciation, and refinance their money out to be recycled for another deal. This technique was super popular as it created great returns for investors. Unfortunately as of late, this technique has slowed drastically and in some markets may have even come to a complete halt. In this post, I’d like to cover why this has happened and what the future holds for BRRRR.

Limited Inventory

One reason for BRRRR being harder to use is that there is less inventory on the market. Homes are selling fast with many offers at or above the asking price. Most of the time in order to do a good BRRRR you need to find a good deal with a lower price point. Good deals are going fast and if you are not on your toes then you will likely get beat out.

Higher Interest Rates

Interest rates are a lot higher now than they were during COVID. As of writing this, interest rates are at 7.17%. This is a ton higher than the 2-3% we saw during COVID. Having a higher interest rate makes it tougher when you refinance your deal. The numbers might not pencil out as you would have hoped because the interest rate is so high.

Fear of Market

This is really not a big reason for most knowledgeable investors but I’d like to include it because I know some people are being affected by this. Many people fear that a big recession is right around the corner and that a crash will likely follow. Some people are too fearful that this might happen and are choosing to not invest at this time. In my opinion, this is not a good reason to stay out of the market because there are still some good deals out there. As long as you put in the work to find a great deal then you should still make it through the bad times.

Despite these reasons above BRRRRs are still out there if you do the hard work to find one. In every market, there is going to be some type of challenge. You must choose to push past the obstacles in your way and do the hard work required to find a good deal. You’ve got this!