Question about BRRRR

[William Zheng]

Hello, I have some beginner questions about the BRRRR strategy.

Here is what I know about BRRRR.

Buy: We put some down payment and buy a house with mortgage. Renovate: We renovate the house if necessary.

Rent: We will use the rent as income source to cover all the expenses including mortgage payment. The rent will be larger than the expenses and we make money from it. Refinance:And then we use the rental house as collateral to get another loan. Repeat: Then Repeat the process.

My questions are:

If we do this BRRRR successfully and have bought maybe 4 properties and get $1,500 cash flow every month. What if something goes wrong here? For example, the tenants lost their jobs and cannot pay rent. If we have to evict them, that can take a long time and the cost is high. We might not be able to afford the mortgage payment and then foreclose the property.

And if we foreclose the property, what would happens to other properties we bought using the foreclosure one as collateral?

What will happen and what can we do if we lost the income source while the expense is ongoing?

Thanks a lot!