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Joan Ryder
June 2023
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Today's Feature Stories

How Does the BRRRR Method Work?

BRRRR is a popular term in real estate that stands for Buy, Rehab, Rent, Refinance, Repeat. This method of investing in real estate is focused on flipping distressed properties, renting them out, then getting a cash-out to refinance so you can fund more investments in rental property.

The difference between the BRRRR Method and investing in property in other ways is that you’re focusing first on distressed properties and second on refinancing what you bought to buy another.

How BRRRR Works

If you use the BRRRR Method, it’s intended to help you create passive income and the ability to continue to buy and own rental properties. The steps include the following:

  • First, you buy a distressed property requiring work to get it ready to rent. You’ll likely find it for a lower price because of the condition.
  • Rehabbing the property is the next step since it’s distressed. You’ll need to bring it up to code and make safety and structural improvements, as well as aesthetic improvements, so it’ll appeal to potential renters and be ready for them to move into.
  • You next determine a rental price and find renters.
  • Once you have renters in place, it’s time to do cash-out finance, converting the equity you hold in the property into cash. You access your equity by getting a bigger mortgage and borrowing more than you currently owe.
  • You can use your refinance funds to buy another property, starting the process over.

The Pros and Cons of This Method

The pros of the BRRRR Method include allowing you to make passive income and build a portfolio of rental properties. As you’re rehabbing the property, you’re also building equity.

The cons are the work that’s going to be required to rehab the property, and you may end up having to get a riskier, more expensive loan since you might not qualify for traditional financing.

You could get ready to refinance and then find out you don’t qualify for as much money as you thought.

Plus, it can be a while before you can tap into cash with this method. You have first to do renovations, then you have to find renters, and it can take some time to complete the cash-out refinance.

The Current State of the BRRRR Method

While the BRRRR Method is something that real estate investors have been doing for quite some time, right now might not be optimal for this approach. One reason is that the 30-year mortgage rates have been bouncing between 6% and 7% for the past year.

Other factors that have made the BRRRR Method more challenging include the rising costs of building materials and increasing taxes.

While prices are slowly inching back up, they’ve been for the past year, appraising for less and selling for less, and that reduces the size of the cash-out refinance. Plus, you have to keep in mind that lenders are much more risk-averse right now.

Rather than doing an 80% cash-out as was common, people are doing 70% or 75% cash-outs, so you only get that much of your loan value back, and the rest has to stay tied up in the property.

Are There Better Alternatives?

If you crunch the numbers and the BRRRR Method isn’t going to work, you can consider holding onto the property and renting it out, or making it a short-term rental, if you’ve already bought something.

If you haven’t bought something, you might buy a home in good condition and then rent it out rather than buy something that needs work.

Another more out-of-the-box approach is participating in crowdfunding a real estate investment. This pools investor funds to buy real estate, and you can get the rewards of being a real estate investor without so much money and work being put in upfront.

Finally, the CEO of BiggerPockets, once a huge proponent of the BRRRR Method to build wealth, has pivoted and recently spoke out, saying it’s not the right time for this type of investment.

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4 Things About Preapprovals That You Should Know

Getting preapproved for a mortgage is almost a requirement in today’s real estate world. In fact, many real estate agents won’t even let you into their cars to go look at houses until you’ve got your preapproval letter in your hand. And that makes perfect sense. Why would a real estate agent take some professional time showing houses if you’ve no such letter in hand. A preapproval letter lets the agent know right off the bat that you’re a serious candidate as a home buyer. Let’s look at four things you need to know about these preapproval letters.

The first thing to know is a preapproval is not the same as a prequalification. Although the terms sound similar they’re not. Both terms apply to the mortgage industry but there are some key differences. A prequalification letter -  the letter will state that it’s a ‘pre-qual’ -  signifies that you’ve had a conversation with a licensed loan officer. With a prequalification, the loan officer will go through a series of questions and at the end of these queries the loan officer will or will not put together a letter that states ‘based upon the information provided’ the individual is in good shape to obtain financing from a mortgage company. 

The key here however is nothing in this loan officer conversation is documented. It’s typically nothing more than a phone call or perhaps an in-office meeting. A preapproval means the needed documentation has been provided and reviewed. If you state that you make $6,000 per month, a prequalification letter will take your word for it but the preapproval status means you’ve backed that income up with things such as paycheck stubs and W2 forms.

Next,  the information provided in order to obtain the preapproval letter must be recent. Your loan officer will ask for your two most recent paycheck stubs covering a 30 day period. Note that paycheck stubs have typically been replaced by remittance advice from your employer. This documentation will provide a gross as well as a net amount of income to be used when calculating debt to income ratios. Providing some paycheck stubs you’ve left in your drawer at home won’t cut it. They need to be the most recent. Why? The lender needs to know how much money you make now, not six months ago.

Bank statements will also be needed in order to get a preapproval letter. For those that are self-employed, these bank statements will work in lieu of any paycheck stubs. Bank statements, again your most recent ones, will third-party verify you have enough money that is yours in your bank account to cover the down payment, closing costs and some left over when the dust has settled. The leftover amounts are referred to as ‘cash reserves.’

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5 Tips to Save in Your Kitchen Remodel

The kitchen is the hub of the household. It is where the family gathers daily to socialize and create delicious cuisine. Without a doubt, the kitchen is also one of the most important rooms to remodel to potentially increase the value of your home. In fact, a home that has undergone a kitchen remodel sells 8% faster, according to realtor.com studies. 

Historically, the kitchen was once hidden away from the main house for several reasons, such as to reduce excessive heat and to control smells. Nowadays that is no longer the case. The kitchen has made its debut as an integral part of the home and perhaps the most important room, which is why many homeowners are looking to upgrade the space. In this article, we will explore tips to save in your kitchen remodel. 

Top Ways to Save in Your Kitchen Remodel 

The average cost of a kitchen remodel in the United States is between $8,500 to $25,000. The figure might seem a bit wide-ranging, but if you are looking for ways to pinch your pennies, then rest assured that with frugal decisions, you can cut costs to keep the total amount in the lower end of the spectrum. 

Choose mid-range efficient appliances 

Sure, it is tempting to pick only high-end appliances for your kitchen, but such high-dollar items are usually unnecessary. You can choose practical, energy-efficient appliances that boast acceptable warranties and look fabulous. 

A factor to consider when picking appliances is longevity. Refrigerators usually last only 15 years or less but a cooktop and range function last considerably longer. Also, if you have a large family then you are constantly washing dishes, so a large, efficient dishwasher becomes a mandatory investment.  

Whichever appliances you choose, try to stick with one brand and appearance. Stainless steel remains the most popular finish choice. If you want your home to appear modern, then you will want to pay close attention to design and appearance while still trying to avoid paying premium prices. Instead, settle for moderate workhorse appliances that provide you with looks, function, energy-efficiency, and longevity. 

Opt for affordable yet durable counter materials 

When you walk into a kitchen, you might believe your focal point is the cabinets but most people zero in on the countertops first. Perhaps it is the clean, sleek design or the sparkle of the surface. A showpiece countertop dictates the cabinetry, room furnishings, and color scheme. 

When picking countertop materials, remember you can pick granite with a rating of a level 2 grade (mid-grade) versus a level 3 (premium grade). The differences are subtle and usually missed by a novice who does not work in the granite business. Choosing a lovely, mid-grade granite countertop offers a greater return-on-investment. The cost of granite countertops runs from $35 to $500/sq. ft. 

Laminate countertops are another option. They mimic the appearance of granite without the high cost. Historically, you could not install an under-mount sink in a laminate countertop, but designs have changed and now you can. Laminate hovers at an affordable $5 to $30/sq. ft.

Quartz (an engineered stone) and concrete countertops are other cost-saving options. The average cost of quartz is $55 to $200/sq. ft. and concrete runs $75 to $200/sq. ft. 

Resurfacing an older countertop with tile is another option. This project typically costs around $10 to $70/sq. ft. 

Go for a cosmetic upgrade instead of a whole cabinet replacement

It’s tempting to purchase all new cabinets for the kitchen but that can become expensive with 30 linear feet of average cabinets costing from $6,412 to $11,400 for installation. However, resurfacing the existing cabinets is a great way to provide an instant facelift to the room. Many opt to carry out refinishing cabinets as a DIY project to save even more. 

You can also replace kitchen cabinets with veneer models instead of real wood. Budget cabinets range from $70 to $100 per linear foot. Handles, knobs, and pull are the crowning glory on your kitchen cabinets. However, that does not mean that you must spend a fortune on the hardware. Knobs can range from $1 to $100 and hinges from $1 to $15.  There is a huge range of prices so you can find your comfort zone within your budget. 

Install a backsplash with attractive, long-lasting materials 

Backsplashes look good and showcase not only the kitchen cabinets but also the countertops. There are a lot of different backsplash materials you can choose to create your perfect backsplash, but they aren’t all created equally. Depending on how much cooking you do, you’ll want to find a material that’s durable, stylish, and long-lasting.

Ceramic tile is very popular but it’s also costly, with the average price hovering at $5 to $100/sq. ft. However, you can pick a porcelain tile for $5 to $20/sq. ft. Also, why not cut costs by using large tiles that would usually be laid on floors as a backsplash? The bigger tiles require less grout and costly cutting. Deco-pieces like glass tiles are easy to fashion into eye-catching mosaics. 

Plan ahead by shopping around and doing some work yourself

Feel out your contractor’s schedule and get him at a slower time of year. Typically the middle of summer and the middle of winter are a little slower and could get you a better rate.

Next, check your local tile, stone, flooring, and bathroom fitting showrooms for odd lots. Odd lots are often left over or returned items. They’re just as good quality, but they go for rock bottom prices. The only catch is that what you see is what you get, so if you need 150 square feet of something, and they have 140, it won’t work. But, many times you can get lucky and find a thousand feet of something discontinued that you can get for pennies. This also goes for sinks and faucets - it really pays to check around, especially if you aren’t picky. 

If you need a small piece of stone for a vanity top, bar top, or table, also be sure to ask about remnants at the stone yard. 

Final thoughts

Yes, you can create the kitchen of your dreams on a shoestring budget with just a few of the ideas above. These tips to save in your kitchen remodel help you create an upscale remodel without spending an excessive amount of money. You can enjoy your beautiful kitchen while feeling good about the fact that you have potentially increased the value of your home, which is a great return on your real estate investment.

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Is Now a Good Time for Homeowners to Switch to Solar?

If you’ve been considering making the switch to solar energy, you might be wondering if now is the right time to do so. Whether it’s cost or efficiency concerns that are the source of your hesitation, we’re here to solve any doubts for you. This article will explore the advantages and disadvantages of switching to solar energy in 2023, so you can make an informed decision about whether now is the best time for you to invest in solar panels for your home.

The Advantages of Going Solar in 2023

The benefits of installing home solar systems have been clear for quite some time now. So why is 2023 a particularly good time to go solar? 

  • Reduces energy bills: With electricity costs continuously rising, solar energy can help you make significant long-term savings on your power bills. Thanks to net metering, your electricity costs can be offset with the energy generated from your solar panels, giving you credit that can be used to reduce your future energy bills. But some states are starting to change their net metering policies, so now would be a better time than any to switch to solar and lock in the best rates you can get for saving on electricity bills.  

  • You gain energy independence: Another reason to go solar in 2023 is the energy independence that solar panels can provide. Solar panels can give you energy independence by allowing you to create your own energy and not have to rely on the power grid as much. A recent study found that a third of Americans are now concerned about power outages, and solar energy backed up with a storage system is a great solution in these scenarios. 

  • More incentives: The IRA has recently increased the federal solar tax credit from 26% to 30%, meaning you can claim 30% of the costs of your solar panels back on your taxes. However, this tax credit is expected to drop back to 26% in 2033 and 22% in 2034, so installing solar panels is something that should be done sooner rather than later if you want to cut down the costs of going solar. 

  • More affordable than ever: Switching to solar has never been so affordable. The cost of solar panels has dropped by 70% in ten years , making this year a better time than ever to go solar. Prices increased slightly in 2021 due to the pandemic, so installing solar panels now while prices have lowered again will reduce the risk of you having to face any cost increases due to unforeseeable circumstances. 

The Disadvantages of Solar Energy in 2023

  • Solar is an intermittent energy source: Solar power doesn't generate power at night, and cloud, snow, or debris can affect the energy production of your solar panels. However, solar battery backup solutions have now become available, so you can store solar power and draw from it even if your panels aren't producing energy at that time. 

  • The upfront costs can be high: Although going solar is now more affordable than ever, the upfront costs of installing solar panels can still be high. Not only will you have to pay for the solar panels themselves, but you will also need to consider installation costs. And if you’re planning on storing your energy by opting for a solar battery, costs can reach up to $9,500 for the battery alone. 

  • Supply chain issues: Some supply chain issues are still ongoing since the rise in demand for solar panels and the delays the pandemic has caused. These issues may be starting to ease in 2023, but it still remains unknown whether supply will be able to keep up with increasing demand. 

So Is Now a Good Time to Switch to Solar? 

It’s clear that the advantages of installing solar panels currently outweigh the disadvantages. Besides, installing solar panels can increase your property’s value, meaning you may see a good return on your investment when the time comes to sell your home. However, if you’re planning on selling your home in the near future, consider that it takes a few years for your savings on energy bills to accumulate and make up for the costs of installing your solar panels, and once installed, you can’t take solar panels with you. 

Ultimately, whether you choose to install solar panels in 2023 or not, solar energy is an increasingly viable and cost-effective option if you’re looking to reduce your carbon footprint and save on energy bills. So if you're considering making the switch, remember that the sooner you invest in solar energy, the sooner you'll start reaping its benefits.

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No Closing Cost Mortgages: Why I’m a Fan

When potential borrowers first think about getting a home loan, they typically start searching around for the prevalent mortgage rates. Then with the assistance of some online mortgage calculator, they can get an estimated payment on the principal and interest payment. (this however, should really be done with the assistance of a loan officer). There can be different ‘add-ons’ depending upon various factors such as credit history and loan amount and so on, but even still getting a handle FULL STORY->

Ask the HOA Expert - Special Assessment Notices

Question: I am a real estate agent who represents condo buyers. As part of an offer, we negotiated with a seller to pay an outstanding special assessment to repair the decks. After my client closed the deal and moved in she was told the repair was only for the penthouse decks and not for her unit. Should I have gotten a copy of the special assessment notice? What can be done now?

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Answer: Yes, you should have gotten a copy of the actual special FULL STORY->

Understanding Squatter's Rights

If you're a landlord, you only want people living in your property who are paying rent. Unfortunately, this isn’t always what you’re dealing with.  

An unauthorized tenant is also known as a squatter, referring to any individual or group of people staying in a property they aren't paying to rent.

Squatter's rights are also known as adverse possession, allowing squatters to continue to use or occupy a property if the owner or landlord doesn't take any action within a FULL STORY->

Can You Manage an Airbnb Remotely?

There are different scenarios where you might be interested in the feasibility of managing an Airbnb remotely.

Maybe you have a second home or are considering one that when you aren’t using it, you’d like to rent on Airbnb. This is common. Another scenario might be if you want to travel the world for a while or take a sabbatical, and you want to rent out your primary residence while you do so.

How possible is it to manage an Airbnb remotely?

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Cash-Out Refinance vs. A Home Equity Loan

When you have equity in your home, which is likely your biggest investment, you can use it to achieve other financial goals. A cash-out refinance is one way to get cash out of your house, as is a home equity loan. With both options, you can do various things with the money, like consolidating debt or renovating your home, but there are differences between the two approaches and pros and cons of each.

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How Does a Cash-Out Refinance Work?

A cash-out FULL STORY->


Mortgage Rates
Averages as of June 2023:


30 yr. fixed: 6.57%
15 yr. fixed: 5.97%
5/1 yr. adj: 5.99%








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Joan Ryder GRI CRS ePRO CRB
E-mail: joanryder1@gmail.com
Website: joanryder.com
(410) 893-1792 x 11

Joan Ryder & Associates Real Estate Inc.
(410) 893-1792
3 Vale Road Suite 200
Bel Air MD 21014


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