New Member: Questions On Brrrr (Mathematical Example)

[Joseph Palladino]

Hello Everybody,

I'm brand new to BiggerPockets and Real Estate Investing and had some questions regarding the Brrrr Strategy.  I'm looking to make my first investment and wanted to get some advice to hedge against risk as best as possible.  I constantly hear on the Podcast about investors finding "Good Deals" but often they don't clearly define the parameters of what a good deal actually looks like.  I know that a good deal will change depending on the strategy being used but for the sake of this post I'd like to understand what a good deal looks like in the context of the Brrrr strategy.  

1.) I'd love it if someone can share a detailed example of what the math looks like because often times that part is breezed over by seasoned investors.  Can someone share an in-depth breakdown of the numbers?

2.) Along those lines, what are the essential calculations that are needed for this to make sense? (Looking for a mathematical model I can reference when analyzing deals) 

3.) Aside from the Home Loan, Repairs & Closing costs what other costs are there when actually purchasing a deal?  And to piggy back off of that what percentage of your ARV do you like your All In-Costs to be?

4.) I live in San Francisco as you all know is insanely expensive.  Is Brrrr effective in expensive markets such as the Bay Area or would you recommend another strategy?

5.) What are the pitfalls or main areas involving Brrrr that can go wrong?  I'd like to know what to keep an eye out for to minimize risk.

I know I have a lot here but a Mathematical example displaying the anatomy of a Good/Ideal Deal from start to finish would answer questions 1-3.  

I appreciate the insight!