Strategic Realty

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A Guide to Building Wealth with the BRRRR Method in Real Estate Investment

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If you’re keen on diving into the world of residential real estate investment, you may have stumbled upon the term BRRRR. This stands for Buy, Rehab, Rent, Refinance, Repeat, and serves as a strategic roadmap for long-term real estate investing. Unlike the one-time profit of house-flipping, the BRRRR method aims for a steady income stream and long-term equity growth, making it ideal for those invested in the long haul.

Demystifying the BRRRR Method

The BRRRR framework provides a structured approach to real estate investment. Starting with purchasing a property in need of some TLC, you move through a series of steps—renovation, rental, refinancing—to ultimately cash out your initial gains. Then the cycle begins anew with another property, setting up a chain of compounding financial rewards.

Even if you’re new to real estate, this multi-step strategy can be approachable with the right planning and a comprehensive grasp of market dynamics.

The Cornerstone: Property Acquisition

As real estate investor and finance educator Todd Baldwin rightly puts it, “Your profitability is determined at the acquisition stage.” Securing a property at a discounted rate or under market value is your first win, simplifying the challenges that follow. Ideally you will never spend more than 70% of the after-rehabitation-value on the acquisition.

Breaking Down the BRRRR Steps

Buy: With a sea of options, it’s crucial to focus on properties requiring upgrades but with promising financial potential. Conduct thorough due diligence to know the exact scope and timeline of necessary renovations. Also, understand your financing options and cash requirement for the project up front. Don’t get so focused on the property that you lose sight of the money side of the equation.

Rehab: This stage involves making the property appealing and livable for tenants. While you might not be an expert in rehabbing, professional consultation can offer accurate cost and timeline estimations. Always have a contingency budget for unexpected expenditures. Control your costs and control your timeline.

Rent: Once the property is up to standard, your goal is to rent it out at a rate that at least covers your mortgage. Property management companies can be invaluable in handling the complexities of tenant relations and ongoing maintenance. Getting the wrong tenant in the property could kill the whole project.

Refinance: This is where patience plays a role. You’ll be accumulating equity in the property as you await the opportune moment for a cash-out refinance. Different lenders have varying conditions, so a nuanced understanding of these requirements is critical.

Repeat: The unique selling point of the BRRRR method is its replicability. Once you’ve mastered one cycle, you’ll find each subsequent iteration easier, adding layer upon layer to your income-generating property portfolio.

Who is the Ideal Candidate for the BRRRR Method?

The BRRRR method is not a universal fit. However, those who are willing to invest the time in learning the ropes and perhaps get guidance from experienced investors can navigate this intricate yet rewarding path successfully. The optimum person for BRRRR is an investor with access to substantial cash or private loans, an understanding of residential construction and project management, and the desire and ability to take on some risk.

The Pros and Cons

Pros:

  • Steady and Reliable Passive Income
  • Consistent Growth in Equity
  • Scalable Investment Strategy

Cons:

  • Significant Time and Financial Investment in Rehab
  • Longer Timeframe to Profitability
  • Increasing Landlord Responsibilities as You Scale
  • Market Risks and Financial Variables

Parting Advice

If the BRRRR real estate investment model piques your interest, knowledge is your most valuable asset. Exhaustive research, expert consultations, and possible mentorship can offer a well-rounded understanding of this intricate yet lucrative investment approach. Reach out to us, and we can get you started on all of those tracks.

While the BRRRR method comes with its share of complexities, proper planning and prudent decision-making can make it a rewarding venture, even for those new to real estate investment.

Catherine Emert Teaches Tony Martinez How to Save Homes with Soda Cans

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[Bend, Oregon] – [08/01/2023] – Strategic Realty, LLC proudly announces the remarkable story of Catherine Emert, one of their esteemed real estate professionals, whose compassion and innovation recently made a life-changing difference for a struggling homeowner. In an inspiring interview with Tony Martinez, owner of the Certified Distressed Property Expert (CDPE) designation, Catherine shared her extraordinary experience in saving a home using an ingenious solution involving soda cans.

The heartwarming interview showcases Catherine’s unwavering commitment to her clients and her dedication to providing million-dollar service in every price range. Growing up in Oregon and serving nearly half the state, with a primary focus on the east side of the mountains, Catherine’s passion for real estate runs deep. Her motivation to become a Certified Distressed Property Expert stemmed from her family’s personal experience during the 2008 real estate crash, where they tragically lost their home. This pivotal moment ignited her determination to make a positive impact on others facing similar challenges.

During the interview, Catherine recounted the inspiring tale of a distressed homeowner who had lost hope after falling behind on mortgage payments following a devastating personal loss. Catherine’s resourcefulness came into play when she suggested an unconventional solution involving soda cans, as Oregon offers a deposit refund on beverage containers. Guiding the homeowner with a compassionate approach, she connected him with local churches and non-profit organizations and encouraged him to leverage the community’s support to overcome his financial difficulties.

Tony Martinez, impressed by Catherine’s exceptional work, remarked, “This is exactly what the CDPE stands for. We really, really want to help people stay in their homes. Every now and then, a story like this emerges, and it just gives me hope.” Catherine’s actions exemplify the core values of Strategic Realty, LLC, and the CDPE designation, demonstrating that real estate professionals have the potential to change lives and foster hope in the face of adversity.

“We’re not here to just sell people’s houses; we’re here to save them,” Catherine proudly stated. Her innovative approach and genuine care for her clients embody Strategic Realty’s vision of improving the real estate industry through technology integration and exceptional customer service.

Strategic Realty, LLC invites everyone to watch the captivating video and read the full transcript of this extraordinary interview on their website at https://movetobend.com/empowering-lives-how-strategic-realtys-catherine-emert-saved-a-home-with-soda-cans/. Witness how Catherine Emert’s efforts in saving a home through soda cans have inspired us all to make a positive difference in the lives of those we serve.

About Strategic Realty, LLC: Strategic Realty, LLC is a prominent real estate company based in Bend, Oregon, co-owned by Kerry O’Neal and Catherine Emert. With a profound commitment to innovation, integrity, experience, and teamwork, the company focuses on residential, industrial, commercial, and agricultural real estate brokerage, real estate development, and distressed property handling, among other services. Their mission is to provide superior experiences for all stakeholders in the real estate market, leveraging advanced technology and exceptional customer service to achieve their goals.

Empowering Lives: How Strategic Realty’s Catherine Emert Saved a Home with Soda Cans

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Discover the heartwarming story of Catherine Emert, a real estate professional from Strategic Realty, whose compassionate and innovative approach transformed a distressed homeowner’s life. In this powerful interview with Tony Martinez, owner of the Certified Distressed Property Expert (CDPE) designation, Catherine shares how she went above and beyond to save a home using a unique solution involving soda cans. Witness the essence of Strategic Realty’s mission to improve the real estate industry through innovation and exceptional customer service. Let this remarkable story inspire us all to make a positive impact on the lives of those we serve.

TONY: Hey everyone, it’s Tony Martinez with the CDPE and I have a very special guest with me here today her name is Catherine Emert, she’s out of the Oregon area and Catherine and I met about a week and a half two weeks ago at the amazing Star Power conference and she shared a story with me a testimonial that just completely blew me away, but not to try to keep you in suspense but I would like to give her an opportunity to introduce herself and just tell us a little background on where she’s from what market she focuses on and what was her primary motivation for becoming a Certified Distressed Property Expert, So, Catherine welcome.

CATHERINE:  Thank you Tony. It was so great meeting you last …  two weeks ago now. I’m born and raised in Oregon. I grew up here in Central Oregon. I serve almost half the state of Oregon right now,  primarily the east side of the mountains. I’ve been in real estate since I was about 12 years old so it’s in my blood it’s what I do. Unfortunately my family was one that was impacted by the crash in 2008 and our family lost our home, and my mom was a real estate broker at the time, and so when I heard about CDPE actually last year at the Star Power conference, I knew I needed to take the course. So when you offered the course at a discount to Star Power members, I went ahead and signed up immediately and I’ve already actually been marketing to Notice of Defaults in our area.  I send a card to them saying “hey you’re not alone we’ve all been through this”, and I had one great gentleman call me and he’d been ignoring all the emails and phone calls and letters from other Realtors, and he said your letter just struck me and I knew I had to call you. So it was a very tragic story. He had lost his fiance in a head-on collision in one of our smaller towns a few months prior, and could not open the mail anymore, and he got behind on his payments. Most of the people that I was hearing from were 60, 70, 80, even hundreds of thousands of dollars behind, and he was $4000, and I said “we’re gonna save your house, how much money do you have in your bank account right now.” 

He said, ‘I only have thirteen hundred dollars,’ and I said, ‘Well, that’s okay… that’s almost halfway there. We’re halfway there, you’re gonna be okay.’ So, I was in the middle of a bunch of things, getting ready to show properties. ‘What’s your email address? I’m gonna send you some information, and I want you to focus on calling every single person that I give you.’  So, a lot of our smaller communities have a bunch of non-profit churches. He, come to find out, was a wounded veteran, so I got him in contact with our local churches. He worked part-time at a laundromat. I said, ‘You know, go and talk to everybody you know, see what they can do to help you.’ In Oregon, you get 10 cents a can for soda cans and beer cans. We told him, ‘Go cash them in, get as many cans as you can.’ And he did, and I think I sent him a total of 50 phone numbers of places and organizations that can help him. He called me a week later and said, ‘You saved me, you saved my house.’ So, I like to tell the story that I saved a man’s home with soda cans because not very many states give you a deposit back on your soda cans, and we just happened to get 10 cents a can back. So, he did it. He, in one week, came up with his $4,000 and ended up getting another $390 a month, every month, to help him with his utility bills in order to keep ahead, and he didn’t even know those programs were out there for him. So, I like to say, ‘We’re not here to just sell people’s houses, we’re here to save them.’ We have the potential and the knowledge that some people don’t have, and we can do that, we can provide that for them.

TONY: Wow, I’m blown away by this. I’m having the same Goosebumps as I did the evening that you told me this because I remember you saying, ‘Oh yeah, I helped the guy save his house through soda cans.’ And I go, ‘What?’ But, say that again, slowly.’

Yeah, when you told me that, it’s absolutely amazing. And this is exactly what the CDPE stands for. We really, really want to help people stay in their homes. We want to do everything humanly possible to help them stay in their homes. And every now and then, a story like this emerges, and it just gives me hope.

Yes, you know, because it’s just more of you, more agents, more to do what you’re doing right now. Engaging the public that in many cases are so overwhelmed with what’s going on, they don’t know what their rights are, they don’t know what their options are. Many of them will flee the property, which is the last thing that they should do. So, I just… You give me encouragement and you give me hope that the message of the CDPE is resonating. In the right hands. We can do a lot of good for a lot of people. And there’s going to be a lot of folks that are going to watch this and want to get a hold of you personally. I think that you are an excellent referral source in the entire Oregon area. I don’t mind plugging you because of everything that you’re doing so far. So, how can they personally reach you? Whether they’re a consumer needing some help, or it’s a real estate professional in a different area looking to send you a referral?

CATHERINE: So, the easiest way is actually just going to our website. Our website is movetobend.com. Those inquiries come straight to me. You can read all about us and what we do for our community on that website, with links to CDPE websites and all of that. So, we really like to stay involved. So, feel free to reach out to me anytime.

TONY: Fantastic! Listen, thank you, thank you, thank you for everything that you’re doing. And keep those testimonials coming, yes, because this is going to inspire others and, as a result, we’re going to help a lot of people. So, God bless you for what you’re doing, and I look forward to seeing you again soon.

CATHERINE: Yes, I look forward to it too. Thank you, Tony.

TONY: My pleasure.

Certified Distressed Property Expert

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Our office has recently obtained the Certified Distressed Property Expert Certification. A Certified Distressed Property Expert® (CDPE) is a real estate professional with specific understanding of the complex issues confront the real estate industry, and the foreclosure avoidance options available to homeowners. Through the comprehensive training and experience, CDPEs are able to provide solutions for homeowners facing hardships in today’s market, specifically short sales.

The current U.S. housing market has caused untold stress and heartache for many American families. Foreclosure is one of the most devastating financial challenges that a family can face and one of the many that can be avoided. The options available for foreclosure are many. The following is a brief explanation of all these solutions, including their benefits and drawbacks.

Reinstatement

A reinstatement is the simplest solution for a foreclosure, however it is often the most difficult. The homeownersimply requests the total amount owed to the mortgage company to date and pays it. This solution does not require the lender’s approval and will ‘reinstate’ a mortgage up to the day before the final foreclosure sale.

  • Benefit: Does not require the mortgage company or lender’s approval.
  • Drawback: Requires that a homeowner be able to pay all back payments, fines, and fees.

Forbearance or Repayment Plan

A forbearance or repayment plan involves the homeowner negotiating with the mortgage company to allow them to repay back payments over a period of time. The homeowner typically makes their current mortgage payment in addition to a portion of the back payments they owe.

  • Benefit: Allows the homeowner to catch up on payments over time.
  • Drawback: Requires that a homeowner be in a financial position to pay not only their current mortgage, but also a portion of the back payments owed. Some mortgage companies will require a homeowner to ‘qualify’ for forbearance.

Mortgage Modification

A mortgage modification involves the reduction of one of the following: the interest rate on the loan, the principal balance of the loan, the term of the loan, or any combination of these. These typically result in a lower payment to the homeowner and a more affordable mortgage.

  • Benefit: Reduces the payment a homeowner is required to make on a monthly basis and may reduce the principal balance of the loan.
  • Drawback: Requires that a homeowner ‘qualify’ for the new payment and will often require full documentation. Lender has to be actively pursuing modifications.

Rent the Property

A homeowner who has a mortgage payment low enough that market rent will allow it to be paid, is able to convert their property to a rental and use the rental income to pay the mortgage.

  • Benefit: Allows homeowner to keep property indefinitely.
  • Drawback: The issues that can arise with a rental property are many, and rent often does not cover the full cost of property ownership and maintenance.

Deed-in-Lieu of Foreclosure

Also known as a ‘friendly foreclosure’, a deed-in-lieu allows the homeowner to return the property to the lender rather than go through the foreclosure process. Lender approval is required for this option, and the homeowner must also vacate the property.

  • Benefit: Many times in a successful deed in lieu, the lender will forego their right to a deficiency judgment.
  • Drawback: Requires that a homeowner vacate the property, and a deed-in-lieu may be reported to credit bureaus as a foreclosure.

Bankruptcy

Many have considered and marketed bankruptcy as a ‘foreclosure solution,’ but this is only true in some states and situations. If the homeowner has non-mortgage debts that cause a shortfall of paying their mortgage payments and a personal bankruptcy will eliminate these debts, this may be a viable solution.

  • Benefit: Does not require lender approval.
  • Drawback: If a homeowner cannot afford their mortgage payment, a bankruptcy will only stall—not stop—the foreclosure process. Bankruptcy can be costly, is damaging to credit scores, and can only be declared once every seven years.

Refinance

If a homeowner has sufficient equity in their property and their credit is still in good standing, they may be able to refinance their mortgage.

  • Benefit: In some cases, this will lower payments.
  • Drawback: In today’s market, a refinance will almost always raise mortgage payments, and is an expensive process.

Servicemembers Civil Relief Act (military personnel only)

If a member of the military is experiencing financial distress due to deployment, and that person can show that their debt was entered into prior to deployment, they may qualify for relief under the Servicemembers Civil Relief Act. The American Bar Association has a network of attorneys that will work with servicemembers in relation to qualifying for this relief.

  • Benefit: If qualified, this will lower payments on all consumer debt in addition to mortgage payments.
  • Drawback: Must be active military to qualify.

Sell the Property

Homeowners with sufficient equity can list their property with a qualified agent that understands the foreclosure process in their area.

  • Benefit: Allows homeowner to avoid foreclosure and harvest some of their equity.
  • Drawback: In many cases today, homeowners do not have sufficient equity to sell their property without negotiating a short sale (see next solution).

Short Sale

If a homeowner owes more on their property than it is currently worth, then they can hire a qualified real estate agent to market and sell their property through the negotiation of a short sale with their lender. This typically requires the property to be on the market and the homeowner must have a financial hardship to qualify. Hardship can be simply defined as a material change in the financial stability of the homeowner between the date of the home purchase and the date of the short sale negotiation. Acceptable hardships include but are not limited to: mortgage payment increase, job loss, divorce, excessive debt, forced or unplanned relocation, and more.

  • Benefit: A short sale allows the homeowner to avoid foreclosure and salvage some of their credit rating. This also keeps foreclosure off the individual’s public record, and in many cases will allow the homeowner to avoid a deficiency judgment. Borrower may qualify for another mortgage in as little as 24 months (as opposed to five years for a foreclosure).
  • Drawback: Short sales can be a trying process in which a homeowner is best served by contracting with a qualified real estate agent to guide the way. 

This represents only a summary of some of the solutions available to homeowners facing foreclosure. Please call me today for a free confidential evaluation of your individual situation, property value, and possible options. If you or anyone you know if at risk of foreclosure please fill out this short form and we will be in touch with you as quickly as possible.

Foreclosure Notices Drop in Deschutes County

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Reported in the Bend Bulletin this morning, Notice of Defaults (the official notice that your bank sends you when you are not making your payment, and they’ve, frankly, grown tired of waiting on you) were about half last month of what they were in September 2010.  This notice initiates the foreclosure process for the lender.  From our experience, this is when most homeowners consider foreclosure alternatives.  One of the most common methods of avoiding foreclosure is a short sale.

It’s hard to say what this means for a market. It is not necessarily saying that people are now making their payments. We’ve seen some banks allow people to stay in their homes for well over a year before serving them with an NOD. We speculate that receiving an NOD has as much to do with internal bank processes as it has with the lack of a payment.

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Our full-service brokerage is strategically positioned in downtown Bend, Oregon, close to the city's heart. We invite you to visit us and allow us to demystify the complexities involved in the process of buying and selling.

325 NW Vermont St., #107 Bend, OR 97703

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