The Buy and Hold strategy allows investors to build a portfolio of properties focused on property appreciation, equity build, and cash flow. The investor profits in the short and long term and has the ability to tap equity for other investments.

Short term the investor offsets mortgage and expense, and ideally realizes a profit by renting the property.

• Long term, the value of the asset appreciates, and the investor’s equity builds.
• The asset’s equity can be leveraged to acquire new investment properties.
• When the property’s value matures to equal or higher than the price paid, the investor can consider selling, or effect a 1031 exchange for another rental property.

This strategy works well with single family homes and multifamily properties purchased in desirable locations at the right price, and in good condition.

Virtually any financing type works for a ‘Buy and Hold’ investment strategy. The easiest is conversion, i.e. converting a primary residence to an investment property with financing already in place. Assuming you started your real estate journey with a 30 year fixed conventional loan, probably at a low interest rate, this is the ideal start, unless your first property is a condo.

Another outstanding financing option for ‘buy and hold’ properties is FHA: This government-backed mortgage loan requires only a 3.5% downpayment and FHA interest rates are traditionally lower than market rates. Do consider upfront fees and MIP. FHA allows borrowers to financing multifamily properties up to a fourplex if you live in one unit.

BRRRR is Buy & Hold strategy used to quickly scale portfolios. Read About BRRRR