Watch out BRRRR, the B2R business model is fastly taking the residential real estate market by storm. The extreme housing shortage plaquing the US has forced many investors outside of their comfort zone and to start building homes from ground up. The best part about B2R is that you do not have to be a builder to capitalize on this rapidly growing trend. 

Over the past half-decade, every major player in the world of investment, from lenders to investors to influencers, has been touting the BRRRR model.

The term itself is catchy enough – it stands for Buy, Rehab, Rent, Refinance, and Repeat. As the name suggests, investors acquire property with buildings, renovate them to increase value, and lease them to tenants. Once the rental income stream is performing smoothly, the investor can collateralize the asset to gain capital for the next purchase.

This process generates a virtuous cycle: one of steady growth and increasing wealth.

This investment model has proven to be wildly successful for investors of all levels of experience. By scouring county tax sales for improved properties with a pre-existing dwelling attached to the lot, many investors have been able to maximize their BRRRR investment potential.

However, only about 15% of properties sold nationwide through county tax deed sales qualify as improved, which complicates its feasibility. Considering that there are historically low numbers of properties listed for sale, any improved property entering the tax deed sale market is going to be sold for top dollar.

Meanwhile, the vast majority of unimproved or vacant land sold through tax deed auctions often gets overlooked. Until now.

Aside from having a superior acronym to BRRRR (seriously, how many R’s is that?), B2R is an exceptional investment strategy that converts useless vacant parcels into high-performing assets. Imagine standing out from your competitors who are competing for just two improved properties at a local tax sale while you effortlessly secure bidding for the remaining 20 vacant lots. B2R makes it possible.

Build to Rent (B2R) is not a new concept, but it has become increasingly popular recently due to low housing inventory.

Simply put, B2R is buying land, constructing a home, and renting it out. Many believe that only deep-pocketed developers can venture into it. However, that’s hardly the case, as small investors can very well carve out their space in this market.

Though large developers are building whole communities of build-to-rent single-family homes, there’s still enough room for small players to partake in the action. So don’t let misconceptions keep you from seizing this opportunity!

Don’t let the B2R model fool you – it’s more affordable than you think.

The key is finding a good vacant parcel, which is easier than you’d imagine. Tax deed auctions, local county tax sales, land banks and state lands lists abound with affordable lots that are perfect for B2R investors.

Avoid overpaying at tax deed sales for an improved property when you could construct new for roughly $100/sqft – and may even earn a better return.

It’s no surprise such methods are growing in popularity, with lenders launching specialty products to help investors finance every step of the way.

Are you still unsure? Rather than embarking on your own construction project, why not be the one who sells the land to B2R developers?

Typically, developers in this field don’t consider tax sales parcels due to issues related to title insurance. But, this isn’t a problem for you. After all, you’re reading this blog on the Tax Title Services website, and our expertise is in qualifying properties for title insurance at a faster pace and lower cost than a quiet title action.

Investors can leverage low vacant land prices and cheaper new construction costs to maximize equity and build multiple homes. By joining the B2R trend as a developer or land wholesaler, it’s possible to capitalize on this investment model for the long haul. Now is the time to find your niche in this lucrative market before it’s too late!