How does Repeat in BRRRR work?

[David Sanford]

Hey guys. I'm currently in the process of closing on a house I plan to flip. Purchase price of $80,000. Needs about $20,000 in renovation and then will sell for approx $135,000. How can I roll over the profit from this deal into the next deal without being taxed so heavily for the BRRRR strategy to work? This is my first flip. So I don't want to leave with a bad taste in my mouth. I considered doing a cash out refinance and keeping the house but I would only get about $20k in doing this (since I can only get 75% of the value) if my math is correct. $20k won't be enough to repeat the process.

[Corey Owen]

BRRRR is for a long term buy and hold property not a fix and flip. What you are doing is just taking the profits from the first home to purchase another property. If that is what you want to do and not hold the property as a rental I would suggest looking into a 1031 exchange.