There’s a reason why the BRRRR method (Buy, Rehab, Rent, Refinance, Repeat) is so popular among professional real estate investors.
BRRRR is a powerful strategy for cashing in on the equity of your current portfolio so you can keep growing.
But even the most experienced BRRRR investors face capital constraints, and that’s where Nectar can provide a valuable solution.
With Nectar, you can acquire and renovate new properties even faster, or invest in business growth by hiring new team members, completing mergers and acquisitions, or covering daily operating expenses.
Cash Flow-Based Financing for BRRRR Investors: How it Works
The BRRRR method allows investors to generate passive income by purchasing and updating distressed rental properties.
Investors will buy and rehab a property, then rent it out. Next, BRRRR investors will complete a cash-out refinance, taking out a larger mortgage and then using that extra cash to repeat the process with a new property.
Here’s how a BRRRR investor can use Nectar financing to grow:
1. Nectar and the BRRRR investor form an LLC
2. Nectar supplies cash which the investor’s long-term mortgage provider recognizes as equity. This allows the investor to meet any LTV requirements.
3. The LLC acquires the property. Nectar is the “Preferred Member,” and the BRRRR investor is the “Managing Member” with day-to-day operational control of the property.
4. Over a 12 to 60 month period (depending on the term length agreed upon by Nectar and the investor), the BRRRR investor buys out Nectar’s equity interest in the LLC
At the end of the term, the BRRRR investor owns 100% of the LLC and the property, and captures 100% of the property's appreciation.
Who is a Good Fit for Nectar?
Nectar’s financing solution is cash flow-based, so we work with cash flow positive operators who are already established (not those who are just getting started). In particular, we look for:
- 3+ years of experience owning or operating rentals
- A cash flow positive portfolio with 12+ months stabilized performance
- An established business entity and dedicated business bank account
- A U.S.-based business
- Less than 75% portfolio-level LTV
We also want to see that the operator is pursuing a high-ROI opportunity. With the BRRRR model, Nectar is most effective in situations where the investor can expect at least a 250% return on fees paid to Nectar.
Partner with Nectar to Accelerate Your BRRRR Investing
If you’re an experienced BRRRR investor looking to grow your business more efficiently, our team at Nectar would love to partner with you.
To get started, simply create an account to fill out our application to see how much you can qualify for. Let’s scale your portfolio faster, together!
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