- Shelby Osborne, the founder and CEO of Five Pillars Realty Group, purchased her first real-estate investment (unbeknownst to her) at age 22.
- When Osborne moved away and rented her property, she started to see the benefits of real-estate investing. From that point on, she knew she could leverage a familiar strategy into an empire.
- Osborne is putting a unique twist on the BRRRR investment strategy — buy, rehab, rent, refinance, repeat.
- Today, she owns 53 units, 14 of which are Airbnbs.
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“I knew that my life in the military was not what I wanted,” she told Business Insider. “And I knew that I wanted to have financial freedom or to pursue whatever I wanted … what I was passionate about.”
When Osborne was still active in the military, at age 22, she purchased a property in Washington State leveraging a VA (Veterans Affairs) loan — a mortgage accessible to active and veteran personnel. Access to the loan enabled Osborne to scoop up the property with a $0 down payment.
A few years later, Osborne relocated to Fort Bragg, North Carolina. But instead of selling the property she purchased with 0% down and reaping the rewards of the appreciation, she decided to rent it out.
“It was cash flowing,” she said. “I was completely surprised. I thought I would just break even. I wasn’t even thinking about investing at that time. And I was like, ‘oh, that’s pretty cool.'”
She continued: “What if I just did that a bunch more times?”
As cash from the Washington property flowed in, Osborne became increasingly frustrated with her life in the military. It was during this time that she started to sharpen her real-estate investment acumen by listening to podcasts and reading books.
Soon, she’d start investing full-time and give up her career in the military.
Fast forward to today, and Osborne has grown that single rental property into a portfolio of 53 units, mostly located in Fayetteville, North Carolina.
A unique twist on a classic strategy
There’s no denying that the BRRRR strategy is one of the most powerful approaches in real-estate investing.
For the uninitiated, “BRRRR” stands for buy, rehab, rent, refinance, and repeat. Essentially, the approach helps force equity into a property through renovations, which can then be leveraged when an investor decides to refinance.
Osborne’s utilization of the strategy came to her out of necessity.
After her first purchase, Osborne scooped up a duplex for $75,000 with a 25% down payment. Next, she house-hacked a four-unit with 0% down, using a VA loan.
But in order to continue growing her portfolio at a rapid pace, Osborne knew she needed to leverage her properties. There was no way she could keep affording 25% down payments on new acquisitions.
Instead of taking a more traditional approach to the strategy, Osborne decided to turn a portion of her properties into Airbnbs. She calls the methodology a “BRRRRbnb.”
“So at the end of the day, I won’t buy anything with less than 12% cash-on-cash return on my investment,” she said. “And I try to get far more than that, especially now that I’m working with Airbnb because your return on your investment is far greater with Airbnb.”
Osborne says that her Airbnbs perform anywhere from 2-3 times better than more traditional BRRRRs. Not only can Osborne charge more than her normal monthly rental rate, she also doesn’t have to worry about vacancy. What’s more, she likes the flexibility that comes hand-in-hand with an Airbnb rental, and can adjust the price as demand increases or decreases. To her, it’s a win-win.
Today, Osborne has used the BRRRR strategy to become the proud owner of 14 Airbnbs.
“The future looks like more of that: some quirky Airbnbs,” she said. “I want to make them more and more about the experience of the person staying in the property, as opposed to just knocking them out.”