BRRR vs. House Hack - Which is better for a first time investor?

[Kj Lee]

Hi, I am planning to purchase my first property at the end of 2021 via House Hack in New Jersey. I recently started reading the Bigger Pockets book that talks about the BRRR method which advises you to first save enough capital so that you can buy a property in cash. I am now unsure of whether to go with the House Hack this year, or wait a few years to save up enough money. Anyone have any advice?

[Nathan Gesner]

I think you misunderstand the concept of BRRRR. Yes, you buy a property for cash, but you have to buy something that is well below market rate. Then you put more money into renovations. Then you put a renter in. Then you go to the bank and refinance the property at the new market rate. IF you bought it cheap enough and fixed it up nice enough, it should be valued at a higher rate. The bank will loan you up to 80% of that new rate, which should be enough to get all your original money back so you can do the same thing again.

It's not as easy as they make it sound. I think house-hacking is significantly easier.

Have you read the book on house hacking? Or Set For Life? Either one of those will explain how the entire thing works.