Commercial BRRRR is a great investing strategy!
So many Rs, four to be exact, but four of five simple steps that make commercial real estate investing a strategic and comfortable process. Commercial BRRRR is a real estate investing process specifically for commercial real estate. It can work for residential as well, but today, we’ll discuss the question, “What is commercial BRRRR?”
Buy
The first step is to buy an undervalued property, namely a fixer upper. You should aim to buy low and sell high. Understanding what the true value of the property is requires much study or experience, which is why working with a trusted commercial real estate agent is crucial if you do not know the market like the back of your hand.
Rehab
The next step is to rehabilitate the building. You are to tailor it to your future tenants, not to yourself. Do not get too invested in the property; think of what would appeal to your future tenants and make the changes that you know will add abundant value to the building.
Rent
As you are working to fix up the commercial property, work with a great commercial real estate brokerage and property management company to start organizing for tenants to come rent your property. The company can start showing tenants the property before you even open the doors so they’ll be ready to move in on day one.
According to Tyler Cauble, it is a smart idea to set the rent price at a similar price to what it would be before you fixed it up. If it is priced similarly to other older commercial residential properties, it will draw tenants to your nicer property.
Refinance
The goal is to make a profit on the commercial property in as short a time as possible. The Commercial BRRRR model intends to help investors maximize profits at a relatively swift pace so they can continue building their portfolio.
The next step of refinancing the property allows you to reap what you have sown, gaining back enough returns to cover the mortgage loan and fund the next investment. You can still own the property and continue getting a passive income.
Repeat
Repeating is what it’s all about. Investing is not a one-time project; it is a repeating process that helps you build wealth over time. In Maryland, Clagett Enterprises can help you!
Trust the Professionals at Clagett Enterprises for Your Realty Needs
If you’re looking for an experienced property management company, the perfect realtor for your property, or a professional to assist you during your purchase of any home, you can rely on Clagett Enterprises. Clagett Enterprises is a full-service real estate company with almost 30 years of experience in the Frederick and Western Maryland area. For assistance with commercial sales, leasing, management, and development and consulting, contact us online or give us a call at 301-665-6009. To meet our team and see some of our beautiful homes, follow us on Facebook and Linkedin.