Keep in mind that most long-term loans have a standard of a five-year prepayment penalty on them. But if rates drop enough, it may even make sense to deal with that penalty to get a much lower rate and much stronger cash flow. DOES BRRRR FIT YOUR GOALS? Even in a down market, BRRRR is a proven strategy for long-term pas - sive income and portfolio growth. Whether you are new to the investor space or you’ve been in the game a long time, it’s important to gauge different investment strategies and find which one best fits your goals. If you want bigger returns in short periods of time, the BRRRR method may not be the best fit for you. But if you are thinking in terms of long-term profits, this strategy could be in keeping with your goals. The real estate market is very fluid. An impending recession is a perfectly understandable reason to be more conservative with your investments. Being more selective with your properties, finding and vetting good tenants, and allowing yourself some cushion with your rents to allow for reasonable cash flow even during tough times are essential habits to build when looking to recession-proof your investment portfolio. • Mitchell Zagrodnik, partnerships coordinator, joined RCN Capital in spring 2022. Zagrodnik brings a strong work ethic, communication skills, teamwork, and ambition to RCN’s business development team. Zagrodnik’s goals are to build new customer relationships as well as maintain existing ones, and to educate potential clients on RCN’s products. Zagrodnik’s previous work in sales and customer service will contribute to RCN’s longstanding commitment to customer relations. Zagrodnik graduated from the University of Connecticut in 2018 with a degree in political science.
homebuyer demand has gone down. You may be able to find a property at a discount; when the market inevitably becomes more favorable, the property you purchased at the lower price will appreciate. There’s no question that it’s not as easy to get these deals done today, but there are still opportunities for great cash-flowing BRRRR invest - ments. It just takes more discipline and patience to find the perfect property. When rates were lower, it was easier to rely on home values appreciating. Now with higher rates, the emphasis has to be on finding a stable cash-flowing property. It’s tough to forecast, but expectations are that interest rates will drop during the next two to three years. By then it may make sense to refinance, and as rates go down, house appreciation will rise again. When that happens, your property that was cash-flowing well in an inflationary market will cash-flow even stronger.
popular. Considering that, wouldn’t the current higher rates make the strategy less attractive for investors to use for refinancing their prop - erties, given that higher interest rates often mean lower cash flow? Interest rates have doubled since 2022, but investors can still produce cash-flowing properties and more than cover their monthly payments with consistent rental income. Understandably, those who are new to real estate investing may be hesitant to try this strategy. Experienced investors, however, can still find ways to use the BRRRR method so that it’s profitable for their properties. It is important to note that not every property is suitable for the BRRRR method. The key to success - fully using BRRRR is keeping costs low so you can make the highest return on investment. One thing buy - ers can take advantage of in a mar - ket like this is that with higher rates, property values have gone down and
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