Avoiding Financial Struggles in Real Estate: A Strategy for Homeowners

Investing in real estate is one of the best strategies that help people secure their future. This is especially true if you purchase your own home. Having a residential property can help you start building equity and provide you with opportunities to improve your financial health.

Unfortunately, the opposite can also happen after you become a homeowner. This means it’s also possible to experience huge problems after paying for your home’s down payment and mortgage. Some people even end up getting buried in debt because of purchasing a property.

To avoid this, you need to educate yourself about smart tactics to avoid experiencing money issues while owning a home.

Financial Risks of Investing in a Residential Property

Deciding to purchase a residential property may seem like an excellent opportunity to make a smart investment. However, you need to realize that, like other types of investments, this particular move can also pose risks and dangers, especially for your financial health. This means it’s possible that you can significantly improve your finances

by buying a home. However, you can also lose a lot of money because of it. The following factors are common reasons why you might struggle with financial problems during homeownership:

Negative cash flow

Expensive property taxes

High interest rates/ inflation

Expensive property maintenance

Even if you are determined to invest in a residential property, you won’t be able to proceed with it once you experience major difficulties in your financial health. You might even end up asking a question such as: “Can I sell my house that’s for a foreclosure?” or “Is there a way to pay for mortgage even if I don’t have enough income for it as of this moment”? You need to find out how to answer these questions and address problems when investing in real estate. This way, you won’t end up losing all your hard-earned money just because of a wrong move.

Smart Strategies to Prevent Money Problems when Owning a Property

Understanding the risks can help you prevent major money problems when owning a home. To ensure you can avoid major financial losses, you can consider learning effective tactics to protect your finances. Here are a few strategies to do so:

Make sure to investigate hidden fees-It may be tempting to purchase an affordable residential property listed in the market. Still, you need to beware of possible issues that come along with it. Sometimes, cheap homes have hidden fees or charges. For instance, they might need expensive repairs or renovations. If not, the property tax may be too expensive. Thus, you need to beware of these factors so you don’t end up regretting your purchase. 

Calculate mortgage properly-Before paying for adown payment, ensure you calculate your mortgage properly. Include other fees such as taxes, insurance, etc. This way, you can determine if you can afford the monthly payment for the property or not.

Build enough funds before purchasing a property-Before you even start scouting for your dream home, make sure you have enough savings. This way, you won’t experience difficulties building funds for homebuying. You can already check how much you might need to pay for a particular property. This way, you will have an idea of how much money you need to pay for the house.

Consider planning for opportunities to increase your income-Even if you have a full-time job, your income may not be enough to pay for the property’s total price. Thus, it would be best if you start exploring other opportunities to increase your income. For instance, you can look for a side-gig. If not, you might consider transforming one part of your home into a rental business. The key is to make sure you can get multiple sources of income even before you start looking for a home to purchase.

Investing a huge amount of money in real estate can be risky. However, when done right, you can definitely manage your finances better. You can even earn money after investing in a residential property, especially if you plan to convert it into a rental property. This is why you need to explore smart and practical strategies that will help you avoid certain problems when investing in real estate.

Perform some research and educate yourself about the best tactics that can help ensure you get to afford your dream home. Also, watch out for potential issues that may arise so you can quickly come up with possible solutions, especially when it comes to dealing with financial troubles when investing.

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3 Boxes To Tick When Selling Your Home

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If you are planning on putting your property on the market this year, being prepared is the key. It is not just about making sure that you price your property right and have a big sign outside of your home. There is a lot more to selling a home than this. So, let’s take a look at some of the different things you need to do.

  1. Make sure your home is in perfect condition – The first thing you need to do is go around your home and inspect it to determine any maintenance tasks that need to be carried out before you put your property on the market, from septic tank pump-outs to plastering, there are so many different things that may need to be fixed in order to get your home in perfect condition. It is critical to do this because it can increase the chances of a quick sale and prevent there from being any problems during the property survey part of the process.
  2. Put together a marketing plan – If you want to sell your property quickly, marketing it effectively is a must. It used to be a simple process. You would hire an estate agent. They would place an ad in their window. People would walk past and that is how interest would be generated. However, in today’s digital age, there are so many different ways that people can search for homes, so you need to make sure you are in all of the right places. This includes the likes of social media and online listing websites. Of course, your estate agent should do all of this for you, but there is nothing stopping you from getting a better understanding and putting yourself out there or at least keeping your estate agents honest by having the required knowledge.
  3. Stage your home so that people can imagine themselves living in it – The final piece of the puzzle is to stage your home in a manner that is going to appeal to property viewers and enable them to imagine living in it. One of the biggest hurdles for people when viewing a property is that it feels like someone else’s home and so they cannot imagine themselves living in it. This is why you need to work hard to make sure that your property is staged in a neutral way that brings out the best assets of the home but presents it in a blank canvas that people can build upon. You could hire a home stager to take care of this for you, yet there are lots of great articles and advice pieces online that will help.

So there you have it: some of the different things we advise you to do if you are going to be putting your property on the market in the near future. Tick all of the different boxes above and you can be sure that you will give yourself a great chance of selling your property at a price you are happy with.

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Home Sweet Home, Shed Sweet Shed

You already know the usual ways to use an outdoor Custom Shed. People park their vehicles inside to protect the car from wind and rain or they store garden tools inside. But when it comes to your storage shed, you’ve also got a variety of creative options to consider.

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Sometimes we can’t find the quiet space we need to concentrate in the house. Whether you need a contemplation space to pursue a hobby or, you want to watch television without arguing with anyone about the remote. Here are some innovative uses to sneak into your special hideaway:

Work from Home Office

Recent global events necessitated this transformation. Sometimes we just don’t have office space in the home. Transform your shed into a quiet space where you can escape to do your work.

A She Shed

Whether you want to create a relaxing oasis to unwind or pursue a hobby, this is a woman’s answer to the popular man cave.

The Art Studio

Turn your shed into a quiet place to paint or complete your glass blowing project. This is a great place to keep your creativity flowing.

The Man Cave

An area outside for the boys with their expensive toys. Perfect to set up a dedicated space for all the sport memorabilia.

Sheds don’t always need to store items to keep them away from the elements. If you are ready to free up outdoor storage space from dirty work, consider some of the uses of sheds that will bring more fun to your family.

Kids Playground

Give your children a safe place to store their toys and play. Use your shed outdoors for boosting their imagination.

Boys Hideout

Create a zombie hideout or spooky space for ghouls and goblins on Halloween Eve.

The shed can be an extension of your home if you know how to use it efficiently. Your imagination is the only limit to how you use storage solutions. Why not use it to complete some extra to-do-list items?

Outdoor Gym

Forgo expensive gym memberships and use free weights or even treadmills in the backyard to create your playground.

Bike Repair Shop

Don’t want to get your motorcycle repaired in the heat? Put your studio in the shade and create your bike shop.

If you come up with the right game plan, you can add electricity to your shed and any convenience you want. Downsizing to save money is becoming more and more popular. Whether for you or mankind’s best friend, here are some creative ways to embrace shed life.

Tiny Living

The tiny house movement is very popular now because more and more people want to downsize and challenge themselves to live a humble life. It is not for everyone, but it is a new way for people to get out of debt.

Animal Shelter

Why not make your outdoor shed an ideal place for your furry friends? Some people add comfortable sofas, fans, or even air conditioners as a separate resting area for their pets.

If you want to store more things in a shed than ordinary outdoor equipment, you’ll have a second place to call home.

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Planning A Home Renovation? You Need These Tips!

Whenever it’s time to renovate the home, you have to put a project together and bring in the experts to help you to make your project come to life. You might bring in an architect to help you with an extension, or you might bring in a decorator to help you with the planning of the colors of the space you’re changing. You should think about bringing in a contractor, too, to work with you on the construction of the place if it’s needed. 

A remodel isn’t a simple job, even the smallest job can be complex if you’re thinking about remodeling the house. You can bring in a construction team, however, who can look at ensuring that they have the right equipment – down to the forklift propane regulator – that will get your job done in half the time. You want to know your renovation is going to be done in the right time frame, and for that, you need to think about ensuring that your renovation is planned to perfection. Below, we’ve put together all of the tips that you need to make sure that your project gets finished on time.

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  1. Budget, and then budget again. The costs of renovations can change even during the project. You want to ensure that your budget is correct and that means planning for all possible eventualities. You should ensure that you have a budget laid out to include every single piece of material and the cost of hiring experts to help. You should also consider adding at least half of your total budget on top!
  2. Make a point of ensuring you’re not overdoing it. You are making changes, and this can often make you choose everything over the top for your home. You should plan your renovation so that you can know for sure that you are doing what’s needed, rather than everything on top of that!
  3. Get as many quotes as possible. You need to do a little research here, and that means getting as many quotes as possible, from materials to equipment to teams of construction experts to help you out. You need to avoid any unnecessary costs, and that means having a clean, clear plan to help you out with those.
  4. Always figure the finances before starting everything. If you have quotes, you can get moving with the next steps. Just because you have a quote for a job, it doesn’t mean that you need to go with that particular company. Choose to figure your finances first so that you can be sure you’re definitely sticking to that budget of yours.
  5. Be patient. This is going to take some time and putting your home renovation project on hold will ensure that you have more than enough money to save for this endeavor. Any renovation done under budget may have corners cut, so do what you can to ensure that you are careful with your budget and your renovation, too.

Your renovation will go to plan with the right project management. Find the right team today and you can get started.

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4 Home Renovation Ideas To Make Your House Feel Brand New

Everyone craves the comforts of a well-designed and cosy home. However, even the most timeless décor can start to feel stale after some time. Whether you are looking to sell your home soon or simply improve it to increase your comfort, a home renovation is always a good idea. 

Depending on the circumstances of your renovation and your financial situation, you can either opt to go all-in or do a few DIY projects. Below are some home renovation ideas to make your house feel brand new. 

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Add New Lighting

Proper lighting brings any room to life. A room that is poorly lit looks cramped and dark, while one that is brightly lit looks more spacious, airy, and welcoming. There are numerous ways in which you can use light to brighten up your rooms. A simple method is to add floor and table lamps to your home. Placing a couple of tall floor lamps strategically in dark corners can make any room come to life. You can then layer these with lamps on side tables to make the room feel warm and cosy. 

If you want to get more adventurous, you can replace some of your outdated ceiling fixtures with some of the contemporary masterpieces currently available in the market. If your house isn’t getting enough light even after adjusting your electric lighting, you should consider renovating it to make your rooms more spacious or get bigger windows. Buddy Loans are an excellent financing option for your home renovation project, even if you have bad credit. 

Swap Out Sofa Pillows

One of the easiest ways to refresh your home is by changing your decorative sofa pillows. Consider mixing up pillows with different patterns, colours and textures, to achieve the modern living room look. 

If you are aiming for a cleaner, minimalist look, select the pillows in contemporary neutral tones. Mix in a few striped and graphic pillows in vibrant colours for a bold and eclectic aesthetic. To increase the cosy factor in your living room, consider adding some velvet or fur pillows. 

Update Your Window Treatments

Many homeowners tend to overlook their window treatments. They have a hard time determining the style that would suit their room best, therefore leaving the windows bare or simply installing blinds for privacy. However, this practice could make you miss out on a whole layer of decoration.

You can dress your windows to suit your taste and style perfectly. From gauzy white sheers, geometric curtain panels to minimalist bamboo shades, there are numerous options to choose from. Ensure that the panels you select match well with the colour of your walls and furniture. 

Add Art

Another great way to spruce up the look of your home is by adding paintings to the rooms. Take out any old pictures you put up before you started redecorating and replace them with unique art pieces that fit your current style. 

If you are inclined to modern art, you can invest in a few prints or lithographs from a local artist who paints in that style. 

Your home should be as comfortable and beautiful as possible. Apply the above tips to improve its look.

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Be a Homeowner and Reap These Benefits Today

To many people, owning a home is a dream. It’s also an asset that they can pass on to their children. Here are more reasons you should be a homeowner today:

Your Children Will Thank You For It

Being a homeowner means that your children will always have a place to go back to. It’s going to be the center of their childhood memories-in fact, it’s a permanent place to create fond memories. That’s why homes have such a strong emotional hold on anyone. It becomes even more important as the children grow up and even as they move out.

A home is a foundation that helps build a child’s personality. The quality of home he or she lives in has a great psychological impact. It’s going to affect the quality of adult they become. Owning your own home eliminates the stress of not having a place you can call your own. And the same goes for the children in your family.

It’s also going to be a place where they can play and study. Having your own home makes it easier to send children to school. And finally, a home is going to protect your children from crimes and violence.

A Home is a Financial Foundation

Having your own home is setting you on a path towards financial freedom. This is an investment in the long term. It builds wealth over time. Even if the structural strength and integrity of the house depreciate, the value of the land it sits on appreciates.

There are many reasons why the value of land appreciates. The first reason is that the population is on a steady rise, and so is the demand for land and housing. In simpler terms, land does get created like other commodities in the market. People are also more capable of buying land with steady employment. And finally, there is low interest rate on land than on other investments.

In addition, you also get tax benefits when you own a home. How does it happen? You will likely get an interest deduction from the property tax portion and interest of your mortgage. It’s highly beneficial because you can offset the initial amount of money you shelled out to buy a home.

And don’t forget that opportunity and every single time you pay your mortgage, say a monthly expense, you own more and more of the home. In other words, you are able to amass equity. Compare this to paying rent which is purely an expense. In addition, your equity increases as the value of the land increases as well.

Ultimately, you have more control in house-related expenses. A big comparison is that rent is often volatile and can change depending on your landlord. But if you own the home, you know the terms and conditions of the mortgage. This gives you more stability as to how much you’re going to spend on a monthly basis.

A home is also a prime real estate subject that you can sell for liquid asset. You can use the money to pay off loans, start projects, start a new business, or have the lifestyle you’ve always wanted. You do this by yourself by studying the market and looking at various real estate websites. However, it’s recommended to choose prudently and call in a real estate agent or broker who can help you with the process.

Positive Perks

You have more control as to the location of the home you want to own. Remember, not all lands and real estate property appreciates over time. Some might actually depreciate depending on the location.

For example, locations that have a high crime rate and are infamous are more likely going to cause the value of the real estate to depreciate. That’s why you have to do your research before your purchase a home.

Look for a bustling and developing local business fora. Are there new and upcoming shops on the way? What developments are being built?

You also want to look at the facilities and amenities available, because those boost the value of the real estate property in question. Take note of the availability of parks, gyms, grocery stores, and other establishments. You also want to take into consideration how far or close it is to work or to school.

And one of the best parts about owning a home is that you have free decorative rein. That means you can paint it in the colors that you want-or that you can paint at all. Remember that you are not always allowed to renovate in rented places.

You can also have your own yard, and you can do whatever you want to it. You can build a garden, build a garage, or even a studio. You have the freedom to do renovations, build a pool, and invite people over. It’s really one of the dreams that can come true if you own your own house.

The benefits of being a homeowner are numerous. Your children are going to thank you for it, and it’s a reliable financial move. Finally, you can enjoy some positive perks. So, be a homeowner today.

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7 Signs You Should Sell Your House and Move to a New One

The process of selling your house and relocating can be overwhelming. You need to be physically and mentally prepare for what lies ahead.

According to a 2020 Federal Reserve report, nearly nine out of ten adults are happy with their housing situation. If your home is not satisfying your needs, however, you may need to sell it and move to a new one. Once you’re ready to move forward, you’ll be happy to know that you have plenty of options to sell your residential property.

How will you know when to sell your house?

Here are six signs that say you are ready to say goodbye to your home:

  1. A Different House Would Better Satisfy Your Needs

You may need a new (and possibly bigger) home if your family is growing. You may also need a new house if you’re about to retire and want to downsize to a smaller residential property. Whatever the case may be, you should strongly consider selling your home if your current setup isn’t accommodating you.

  1. Your Area is a Seller’s Market

Real estate experts suggest selling your house if you satisfy any of the following conditions:

  • There’s a lot of selling and buying transactions happening in your neighborhood or community
  • The length of time houses are staying on market is going down
  • The prices of residential properties in your area are rising

You may also notice that houses similar to yours are fetching high prices. If you’d like to check this, you could use a real estate selling app to get a glimpse of the prevailing housing market.

If you’ve confirmed that you can sell your house at a pretty good price, you have the choice of walking away from your home with some serious cash.

  1. You Have the Financial Capability to Relocate

When you sell your home, you need to pay for the relevant costs. Some of these expenses include real estate commissions, relocation expenses and possible requests from buyers to pay some of their closing costs. If you plan to purchase your next home and apply for a mortgage, you’ll need to have ample cash to make the down payment requirements.

If you’re short on funds or foresee problems paying real estate-related expenses (even after you’ve successfully sold your house), you’re better off waiting and saving up money before you list your property on the market.

  1. You’re Emotionally Ready to Sell Your House

Remember that selling your home is an emotional issue, as well. Before you put the “For Sale” sign in front of your house, take a few minutes to answer the following questions:

  • Are you prepared to move out and leave the place where you, your spouse and your kids have made lots of wonderful memories?
  • Are you ready for honest and hardball negotiations over what property buyers are willing to pay for your house?
  • Are you prepared to hear the reasons prospective buyers believe your house isn’t perfect?
  • Are you willing to put in the work necessary to prep your property for house hunters?
  1. You Consider Your Home as “High Maintenance”

Maintaining a home can get costly. You have to take into account repairs and scheduled services, such as exterior house cleaning, septic service, snow removal and landscaping.

You may want to sell your home and move to a less expensive residential property if you are sick and tired of watching your payments drain your bank account.

  1. The Neighborhood is No Longer Appealing for You

You or your neighborhood has changed, and you’re no longer satisfied in your current community. There are plenty of reasons for this kind of mismatch. Your family, for instance, may be tired of the restrictions imposed by the neighborhood association.

Another possible reason is that you’re tired of the long commute to work. You may be burning outbecause of the number of hours you spend traveling to the office every day.

If these are your reasons, you may benefit from selling your home and moving to an area that will make you happier.

  1. The Renovations You’ll Do Won’t Add Much Value

Some homeowners remodel their houses to capitalize on a resale. Before you dip into your savings to pay for a renovation, find out if this move will add value to your residential property.

If you are unsure what kind of remodeling you need to do to increase the value of your home, get in touch with a real estate agent. This professional should know what upgrades will be worth spending on – and which ones you should avoid.

If you’re saying yes to one or more of these signs, selling your home could turn out to be a beneficial experience for you. At the end of the day, selling your house and moving on is a personal decision. Do what you think will help you and your family live happily for many years to come.

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5 Things You’ll Need To Check After Flooding

5 Things You’ll Need To Check After Flooding


The United States has a history of dramatic flooding. Natural disasters are often the underlying cause behind the changes in our American landscapes. Hurricanes and storms can work together to trigger flash flooding in some of the most vulnerable states. If you live in the Midwest and Southeast of the US, you may be familiar with the risks of changing water levels. Louisiana, Oklahoma, Florida, and Tennessee are some of the most exposed states. Floods are responsible for around $6 billion in damage every year. Therefore, if your home has been through flooding, you want to take rapid actions to reclaim your peace of mind. 

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#1. Emergency water removal 

The top priority to avoid lasting flood damage is to proceed to safe and quick water removal. Whether your basement has been flooded by heavy rain or you’re dealing with a burst water pipe, you need to reach out to a professional team to help you get rid of the water. Indeed, effective water removal requires not only specialist tools and equipment but also complete water management. The last thing you want is to throw the water out of one window to have it come back through another way! That’s where expert teams make a huge difference. 

#2. The crawl space

Sometimes, you don’t see the signs of flooding. Perhaps, the house feels damp or musty, but you can’t identify where the water hides. Did you know that many homeowners encounter expensive repair costs because they didn’t realize their house was flooded? This can happen when water stays in areas you don’t get to check frequently, such as the crawl space underneath your home or the unused basement. Typically, stagnant water can affect the temperature in your home, so you can use this to locate the hidden flood! 

#3. Your insulation

There was a lot of water, but thankfully it’s all gone rapidly. Here’s a question for you: Where did the water go? Stagnant water doesn’t evaporate mysteriously. If a significant puddle has disappeared, you want to check into your structural elements. Some insulation systems can absorb water, which means that they retain the moisture inside your walls. This will gradually affect the temperature inside the house, rendering the insulation ineffective. Additionally, the humidity can also lead to structural damage as it is slowly released over time. 

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#4. Structural damage

As mentioned, structural damage tends to occur when the foundation or walls are severed affected. In essence, it means your home structure is compromised. Even if the water goes away, you want to make sure you’ve got a team of experts to check your property structure and solidity. Typically signs of a compromised structure can be cracks along the exterior walls or the ceiling and sinking of the foundation. 

#5. The cause of the flooding

Flooding can happen for a variety of reasons. Hurricane, heavy rains, and storms are some of the most frequently quotes explanations for sudden flooding. However, a poor plumbing system, compact soil, and porous structure can also lead to water inside your home. Ideally, you want to understand the cause and determine whether you can prevent future flooding from happening. 

Nobody wants to deal with home flooding. However, more often than not, floods are not as devastating as they sound. If you act quickly and surround yourself with trustworthy specialists, you can protect your home from dramatic damages. 

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5 Things You Need to Know When Building a New Home

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Do you wish to live in your own house? Building a new house is an exciting experience. However, it can be overwhelming. Although builders are experienced in their job, you need to participate in every aspect of the home building process to make sure you end up with your dream home.

You need to make significant decisions regarding the house’s structure and designs since building a new home is not a passive exercise. Failure to make these decisions may force your builder to make them for you. Therefore, your needs and preferences may not be considered.

Additionally, failure to make significant decisions can also alter your budget. The following are some factors you should consider when building a new home.

Know your Budget

Before you begin building a new home, you need to know your budget. This will help you determine whether you can afford your desired home. Most house plans provide a cost-to-build tool, giving you an accurate estimation of the construction cost based on the area you prefer to build.

These numbers include tax benefits, construction costs, down payment funds, and other related costs. Instead of building another house in another area, you can opt for a Knock Down Rebuild (KDR) from a reputable builder.

Check your Builder’s reputation 

Although there are many builders available, they defer in terms of competency and experience. Therefore, you must research and determine the most reputable builders. You can search for their information online, or you can also get referrals from friends and family members. Work quality and punctuality should be your primary focus.

Build the Home with Resale in Mind

Regardless of how you love the home under construction, you may have to sell it in the future. Therefore, it is essential to be mindful of its resale value. Avoid adding a lot of upgrades that may overprice the home for the neighbourhood.

You should also avoid adding excessive extraordinary designs or features. The features you choose to install should also be appealing to others.

Think Green

Ensure you research features and designs that maximise your home’s energy efficiency. Your builder and architect should ensure that your windows are south–facing for you to maximise the amount of sunshine.

You should also ensure that the laundry, bathrooms, and garages are located on your home’s south side to maximise heat loss. It would help if you took your time to choose the best HVAC systems and energy-efficient appliances.

Remember to Make the Punch List

A punch list is a list created after finishing the construction process. It entails what should be repaired or what still needs to be done on the new construction. Your contractor or builder can help you create this list. It would help if you also took note when you visit the building. This can help you to detect some errors or what you think should be improved.

Conclusion

Possessing a home is a significant achievement in a person’s life. Although the building process is a fun activity, it requires the owner to participate in every aspect of the construction process. This ensures that their needs and preferences are considered.

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How Financial Independence is Possible through BRRRR

If you’re interested in getting into real estate investment, you will hear about the Buy, Rehab, Rent, Refinance, and Repeat (BRRRR) method. When done correctly, this method will allow you to make most, if not all, of the money that you invested on the property back in a short time.

This investment strategy can be used on fourplexes if you can afford it, allowing lower regular expenses on a property compared to one to three-unit properties. When someone moves out of the dwelling and your property has a vacancy, your income will not go down to zero like it would with a single-family home. Instead, you will still have income coming in from your other two units while you look for a new tenant.

What is the BRRRR Investment Method?

The BRRRR method is a real estate investment strategy that many real estate investors recommend. However, several steps are necessary to make your entrance into the real estate investment world as smooth as possible. With that in mind, this is what you need to know about each step:

  1. Buy

The first step is to purchase a property that needs some upgrades and repairs. The property purchase can be made either by paying in cash, using a private home loan, or using a government-backed loan. However, to improve your investment’s potential return, you must conduct a fair amount of research when buying a property. Ensuring that you get the best deal possible in the property you’re trying to rehab.

  1. Rehab

When you find a property and purchase it, you will begin the rehab process, which, if done right, will address any potential upgrades and repairs on the property. Also, it would be best if you got the home looked at by an inspector who will recommend repairs and upgrades to things like:

  1. Replacing drywall that is damaged
  2. Bathrooms that need an upgrade
  3. Roofing repairs
  4. Installing new carpet or paint
  5. Landscaping overgrowth affects the property’s appeal
  6. Replacing kitchen appliances that are not working properly
  7. It can build bedrooms or units for single-family residences, duplexes, triplexes, and fourplexes.

Once the repairs and upgrades get completed, they will increase the property’s value.

  1. Rent

After the property goes through the rehab process, you will begin to look for renters. This step requires that you screen potential tenants by making sure that they will afford their monthly payments. Finding the right renter will take some work, although you must make sure that you’re not too demanding since no one is perfect.

Also, an appraisal must be done on your property once the tenant moves in. You will, of course, have to notify the tenant when the appraiser is visiting their property. Moreover, it will also be beneficial to you if the unit is looking clean and organized by the time the appraiser shows up.

  1. Refinance

Once a tenant has lived in the property for several months and you have built an acceptable amount of rental history, you will be able to start the refinancing process. This process will require that you find a lender who will offer a cash-out refinance since most real estate investors recommend it. After the refinancing on the property, the money you borrow must be equal to the appraised value for the BRRRR strategy to work.

  1. Repeat

After you finish the process, you will take everything you learned and the cash you have taken out, and you will be able to start the process all over again. You can also even build a system that implements all the lessons you learned in your previous BRRRR cycle. Moreover, implementing past experiences will enable you to make the process easier and better for future tenants.

Government-Backed Loans

One obstacle with using the BRRRR method is that it requires that you fund not only the purchase of the property itself but the repair and upgrade costs. These costs can be high, and unless you’re an amazing saver, it might be a bit too much to afford. Thankfully, there are government-guaranteed loans that can cover the cost of rehabbing a property while also offer several benefits; these programs are:

203k FHA Loans

An FHA 203k loan allows you to buy a home and finance the repairs with the same benefits offered by FHA home loans. These benefits include:

  • Low 3.5% down payments
  • If the down payment is not affordable, you can get the money as a gift from a friend or family member.
  • The seller can also cover closing costs.
  • FICO scores of 580 also qualify, with some lenders going even lower.

However, FHA 203k loans can also cover repairs and upgrades to properties purchased and used for the BRRRR process. These upgrades and repairs are:

  • Remove all health and safety hazards.
  • Add units or bedrooms to a property with a limit of up to four units.
  • Update property accessibility for disabled residents.
  • Replace appliances that might be malfunctioning.
  • Change carpets, paint, and landscaping.

VA Rehab Loan

The VA Rehab Loan is the VA’s response to the 203k FHA loan. However, this loan is for veterans, active-duty service-members, and surviving spouses of deceased military members. Moreover, the loan offers some of the best benefits available like:

  • Zero down payments
  • Low monthly costs
  • Low-interest rates
  • No mortgage premiums
  • No prepayment penalties

Eligibility requirements for the VA Rehab loan are no different from the requirements for the regular VA home loan. Nevertheless, rehab loans meant to finance the repairs and upgrades to a property; including:

  • Repair doors, windows, roofing, and gutters.
  • Improve Insulation
  • Treat and get rid of mold and lead paint.
  • Upgrade the property to meet accessibility requirements for disabled veterans.

Both the FHA 203k and the VA Rehab loans are lent out by qualified lenders and guaranteed by the United States government. Meaning that the lenders get covered if a borrower must default on a loan, which in turn allows the lender to be a little less stringent about an applicant’s credit score.

Summary

There are several benefits to using the BRRRR investment method. These include the potential for a high return on investment, a fast way to build equity, and the potential for lower overall costs and risks once you start owning and renting out several properties. However, the initial costs might be slightly high, although government-backed loans are sure to reduce those costs significantly.

Phil Georgiades is the CLS for VA Home Loan Centers, a government-sponsored brokerage specializing in VA Home Loans. He has been practicing real estate in a professional setting for 22 years. To apply for an FHA home loan, call us at (877) 432-5626.

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