There is a way to build a sizeable property portfolio, even if you don’t have all the cash yourself. The model is known as BRRRR, which stands for Buy, Rehab, Rent, Refinance, and Repeat.
The premise is simple: find a property that is dilapidated or in need of refurbishment, negotiate a substantial discount on the asking price, use an angel’s investor’s money to buy the property and do it up. Then refinance – usually through a mortgage with a traditional lender – which allows you to pay back your angel with the agreed rate of interest.
You then rent the property and use this money to cover mortgage payments and to provide yourself an income. The angel, happy that you’ve delivered on your promise, then reinvests and you buy your next property, and so on.
Over the past few years, the BRRRR movement has gained momentum, driven by books such as “The BRRRR Method: Build a Rental Empire with Nothing Out of Pocket”.
The concept is also espoused by influencers such as Abi Hookway, who has 185,000 followers on Instagram, and teaches seminars on how, as a single mum of two, she went from £24,000 in debt in 2018 to a £7.5m property portfolio today, all using other people’s money.
But does BRRRR really live up to the hype or is it just another “get rich quick” scheme that promises more than it delivers?
Husband-and-wife team Mark Churley, 51, and Susannah Pearce, 44, set out on their BRRRR journey last year.
“Mark took a course in the spring,” says Pearce. “There are loads of free training modules available online.” They soon discovered property entrepreneur Aran Curry, founder of Insight Education, and invested a “significant” sum to secure him as a mentor.
“He has more than 200 properties in his portfolio,” says Churley. “There are a lot of people out there who have a small portfolio and have switched their focus to offering training full-time.”
Through Curry they discovered dedicated software that helps would-be landlords find bargains. “Property Filter helps you search for properties that have been reduced multiple times, for example, which could mean you have a motivated seller,” says Churley.
Through his network, have also received valuable recommendations for trusted tradespeople, solicitors, accountants and estate agents. “The first thing we did when we started this journey was to find a good builder,” says Pearce.