New REI BRRR Question

[James Casella]

Hello All,

I am new to REI. I have been reading books, listening to podcasts and engaging with others here on BiggerPockets. Right now I am trying to get into the BRRR strategy out of my own market. When watching videos online and reading the books I have realized that during the analyzing of these deals they do not account for the rehab period during the process. They account for monthly rent income, but what about when the lot sits vacant during the rehab process? Do we make up for it on the back end with first months deposit and upfront fees? Or is it the 5% average we use for when the lot sits empty included in that number? Thanks in advance!

[Joe Villeneuve]

Forget the 5% in your analysis.  It's never accurate.  Use actual numbers.  If the property sits vacant for the rehab period, you will know the exact expenses you must cover (you better), so just use those numbers.

Don't guess, don't fudge, use accurate numbers. REI is odd that way...you don't have to guess/fudge because you can get accurate analysis numbers before you buy.