BRRRR and house hacking are two ways to stretch your money in real estate. One recycles your cash through a repeatable cycle. The other lets your tenants help pay for the place where you live. Both can work, and both punish sloppy numbers.
BRRRR in plain English
BRRRR stands for buy, rehab, rent, refinance, repeat. You buy a house that needs work, renovate it, rent it to a tenant, refinance based on its new value, and use the cash from the refinance to do it again.
- Buy: at a price that leaves room for repairs and costs
- Rehab: to a standard that rents well and appraises well
- Rent: to a qualified tenant at a market rate
- Refinance: into a long-term loan based on the improved value
- Repeat: only if the numbers still work
The risk is in the refinance. If the home appraises lower than you expected, or lenders change their rules, you may not get all your money back out. Plan for that before you start.
House hacking in plain English
House hacking means you live in part of a property and rent out the rest. That could be a duplex, triplex or fourplex where you live in one unit, or a house where you rent rooms or a basement apartment. Because you will live there, you may qualify for owner-occupant financing, which can have lower down payment requirements than investor loans. Ask a lender what applies to your situation.
Who each strategy fits
- BRRRR suits buyers who can manage renovations, have reserves, and understand their lender’s rules
- House hacking suits buyers who are willing to share a property with tenants and want to lower their housing cost
How we help
We look at the same things on every deal: purchase price, repair cost, after-repair value, rent, and what happens if one of those is off. We work with investors across Atlanta, Brookhaven, Decatur, Duluth, Ellenwood, Griffin, Hampton, Lawrenceville, Lilburn, Locust Grove, McDonough, Norcross, Snellville, Stockbridge, Stone Mountain and Tucker. Talk to Nil about approved lenders.
Related: rental property investing and first-time investors.
Nil Patel is a licensed Georgia real estate salesperson with Keller Williams Realty Atlanta Partners. This page is general information, not legal, tax or financial advice, and nothing here is a commitment to lend. Talk to a lender and a real estate attorney about your own situation. Investing involves risk, and past results do not guarantee future results. If Nil, a team member or an affiliate wants to buy a property directly, that buyer will say so in writing before you sign.