Real Estate Rookie (BiggerPockets)

Episode: BRRRR for Beginners & The “Lazy” Method to Raise Rents (Rookie Reply)

Date: October 3, 2025
Hosts: Ashley Kehr & Tony J. Robinson

Episode Overview

Ashley and Tony dive deep into beginner-level real estate investing, focusing on demystifying the BRRRR (Buy, Rehab, Rent, Refinance, Repeat) strategy, addressing spiking insurance costs, and revealing stress-free methods for raising rents. The hosts answer three listener-submitted questions, offering practical guidance for rookies working on their first few deals. Major themes include creative ways to fund deals with limited cash, strategies for navigating rising insurance premiums, and people-centric approaches to rent increases—always with a tone that's warm, supportive, and info-packed.

Key Discussion Points & Insights

1. Is the BRRRR Strategy Dead for Small Investors? (Listener question from Reese)

[00:56 – 10:49]

Definitions & Clarifications

• BRRRR Explained: Buy, Rehab, Rent, Refinance, Repeat—intended for building a long-term rental portfolio, not necessarily flipping.
  • Tony J. Robinson [01:10]:
    “In a traditional BRRR, you’re keeping that property as a long-term buy and hold asset… you’re going to buy it, renovate it, refinance. Get all your capital back, rent the property out, and then take the money you got from the refinance and recycle that into your next deal.”

Syndicating Small-Scale Deals

• Listener Reese suggests pooling $25–$32k each from five investors to flip or BRRRR properties—but Ashley points out the strategy described is more of a flip, not a true BRRRR.

Legal and Logistical Hurdles

• Pooling Money:

  • All members must be active participants for it to be legal without complex syndication regulations.
  • Joint ventures with five partners can become complicated unless roles and voting rights are clearly defined.
  • Ashley Kehr [02:51]:
    “Each investor would need to be active in the deal … They need to be active in the deal. So maybe one’s doing the bookkeeping, maybe one’s managing the contractor… I see this as a headache.”

• Alternative Paths:

  • Instead of splitting equity among many partners, consider:
    • Hard Money Loans: With ~$32k–$40k, you may be close to qualifying for hard money (lender finances majority).
    • Private Lenders: Friends/family could act as lenders, earning interest rather than shares.

• Cash vs. Returns Tradeoff:

  • More capital in = better cash flow due to lower mortgage, but not necessarily a better cash-on-cash return.
  • Ashley Kehr [07:39]: “Infusing cash into your deal doesn’t always make it a better deal. There are more metrics to look at than just cash flow.”

Notable Quotes

• Tony J. Robinson [05:13]: “Too many cooks in the kitchen… In your operating agreement, you can just designate that there are certain major decisions you have to vote on as a group.”

• Ashley Kehr [07:39]: “There’s a little confusion here as to like BRRRR is dead unless you have huge capital… Even if you infuse more cash, it’s just going to change your cash-on-cash return, it’s not going to change the other numbers on the deal.”

2. Coping with Skyrocketing Insurance Premiums (Listener question from Sam)

[12:37 – 23:41]

The Rising Cost of Property Insurance

• Listeners report 28%–33% annual increases—sometimes with no prior claims or clear explanation.
• Market Trend: Natural disasters, market shifts; insurance is now critical to rental property viability.
  • Tony J. Robinson [15:06]: "We're seeing rising insurance costs as a more common reason deals aren't penciling out... Insurance simply has to be part of that conversation in a way that maybe it wasn't five or six or seven years ago."

Strategies for Reducing or Managing Costs

• Shop Around: Use brokers to ensure apples-to-apples comparisons.

  • Even if all quotes are high, at least you’ve validated your best options.

• Adjust Deductibles:

  • Raising your deductible reduces annual premiums—but not always by much.
  • Ashley Kehr [19:55]: “For $1,000 deductible, total cost would be $3,300. For $5,000 deductible, $2,800… all the way up to $50,000 deductible and a cost of $2,136.”

• Update Insurer on Upgrades:

  • Notify providers of new roofs, removed pools, improved features—could reduce premiums.
  • Tony J. Robinson [20:59]: “Making sure your insurance provider has the most updated information… sometimes that can reduce the cost as well.”

• Remove Liabilities:

  • Items like bikes, slides, trampolines, or wood stoves can increase premiums.
  • Ashley Kehr [23:00]: "You can talk to your insurance broker about this. What are red flags..."

Self-Insurance: A Niche Consideration

• Some investors with cheap, debt-free properties may “self-insure”—putting premium money in savings instead, only feasible without a mortgage.

Memorable Tangent

• Tony J. Robinson [23:41]: “Trampoline is a brand name… the generic is a rebound tumbler. Never in my life…”

3. The ‘Lazy’ Genius Way to Raise Rents (Listener question from Jimmy)

[28:46 – 35:18]

Scenario

• Long-term tenants paying $1,400/month in a home easily worth $2,000–$2,500/month.
• Tenants are great—pay early, make no fuss, handle minor maintenance themselves.

Approaches for Raising Rent Without Losing Great Tenants

• Value of Good Tenants:

  • Tony J. Robinson [28:46]: “There’s some level of value we should give to peace of mind…”

• Market-Based, Stepped Increases:

  • Share comparable market data transparently.
  • Use “step-up” increases rather than a big jump; e.g., $50 more for three months, then another increment.
  • Especially critical for inherited or long-term tenants.

• Consider the Full Costs of Moving for Tenants:

  • Highlight costs and hassle of moving to reinforce the value of staying.

• Negotiation and Tenant Input:

  • Invite tenants to propose an increase; often, their number may surprise you.
  • Tony J. Robinson [34:33]: “I really like [Dion McNeely’s] approach where he puts the onus on the tenant to say, like, hey, what do you feel is a fair amount?... A lot of times they’ll end up saying a number that’s higher than what he even thought.”

• Offer Lease Options:

  • One-year at higher increase, or two-year at lesser increase.

• Playing the Long Game:

  • Sometimes, for truly exceptional tenants, Ashley recommends not raising rents at all.
  • Ashley Kehr [34:08]: “I’ve had a tenant that has lived in a property for… nine years. And I’ve never raised the rent once because they have always paid on time. It’s like a different unique property to me that I want to keep forever.”

Notable Quotes

• Ashley Kehr [31:08]: “It has to be really, really scary and uncomfortable… So I try to just do the step up thing instead of just slapping them with, like, $500 right now.”

• Tony J. Robinson [34:33]: “Peace of mind… I think there’s a lot of peace of mind that comes along with great tenants.”

Timestamps for Important Segments

• Introduction & Main Topics Preview – [00:00 – 00:27]
• BRRRR for Beginners & Group Investing Logistics – [00:56 – 10:49]
• Insurance Premiums, Options & Self-Insurance – [12:37 – 23:41]
• Rent Increase When Tenants Are Excellent – [28:46 – 35:18]

Tone and Style

Ashley and Tony’s conversation is light, practical, and friendly. They approach each rookie query thoroughly but with kindness, emphasizing clarity, options, and mutual respect between landlords and tenants. Their advice is always actionable but free of hype—suitable for beginners and cautious investors.

Notable Moments

• [05:13] Tony: “Too many cooks in the kitchen… designate major decisions for a group vote.”
• [07:39] Ashley: “There are more metrics to look at than just cash flow.”
• [15:06] Tony: "Rising insurance costs are a major reason deals aren't penciling."
• [19:55] Ashley: Walks through an actual insurance quote—shows how higher deductibles don’t always deliver big savings.
• [23:41] Tony: Fun fact—“trampoline” is a brand name, generic is “rebound tumbler.”
• [28:46] Tony: “There’s value to peace of mind with great tenants.”
• [34:08] Ashley: Sometimes chooses not to raise rent for exceptional longtime tenants.

For aspiring real estate rookies, this episode is a masterclass in fudging deals with limited resources, adapting to market changes, and balancing the math with the human factor—all while maintaining the cheerful, inclusive spirit BiggerPockets is known for.