Meet Vayna Jerabeck, a zealous real estate investor with an ambitious plan to make ,000 by refurbishing a property.
A Promising Purchase
Jerabeck recently made a bold move in Seattle, Washington, purchasing a home for a hefty ,000. Her initial investment was a modest 3% down payment of ,000.
Refurbishing for Return
She projects a ,000 refurbishment of this property to significantly increase its worth. Jerabeck believes this renovation will boost the property's value to an estimated ,000.
The BRRRR Method Strategy
To maintain minimal housing costs, Jerabeck employs a technique referred to as “house hacking.” This involves renting out a portion of her dwelling while also residing in it, to offset mortgage expenses. Her long-term strategy revolves around the BRRRR method – buy, rehab, rent, refinance, repeat. She plans to move out after a year, purchase an additional property and replicate the process.
A Helping Hand from FHA
Jerabeck's strategy may be of interest to those considering a Federal Housing Administration (FHA) loan. This type of loan, typically attracting first-time buyers, requires a 3.5% down payment and stipulates that the buyer must reside in the property for at least the first year. The property may subsequently be converted into a rental, a popular strategy among Americans aspiring to become landlords.
The BRRRR method has yielded significant returns for savvy investors. For instance, an entrepreneur from Atlanta acquired a second property using a home equity line of credit on his initial home. Another young investor in Texas effectively doubled his investment by renovating a property that he purchased for ,000. Similar success can be achieved by strategically applying this method.