Can you TRULY Manage Risk by BRRR?

[Ilan M Aliphas]

BRRR sounds great! But is it really a good as they say? I'm on my rookie deal playing this game of RE. I own my primary home and just signed my first investment property. Woohoo!!! For my firsts deal I decided to go for a semi-TK SFH that will make a phenomenal STR (I hope!). We will soon find out... by semi TurnKey I mean it's a beautiful 3year old house that only needs a paver-stone patio.

I have a good job and 3 kids under 7yrs. Have done tons research and love spending time learning from this great community of investors. The drumbeat of BP is definitely high on BRRR. Reading most of your posts and books, BRRR is what I was convinced I wanted to do until it came down to making offers. Not because I don't have time (COVID opened that door a bit) but because of risk.

Reading other threads most of you make and argument about BRRR will accelerate your wealth building but you have to put in the time. I agree but there is a huge BUT here... most of you don't talk about risk. You need to put in the time but also take on the risk. You don't know what you are going to find out below the surface of a remodel. Which is fine if you evaluate the deal as such... factor risk into your numbers. My point here is that so often I see comments and great discussion about different strategies and the BRRR crowd forget to talk about risk almost every time. They mention how much they hustle but not the accuracy of their remodel projections in terms of both time, quality, and money.

Also, we must all realize that most the players that tried to play this game and lost all their chips don’t stick around BP forums to tell their story.  There is a selection bias here that us new people trying to get in the game must realize.  Higher risk strategies will look way better after you’ve already won the bet.

Will I do a BRRR one day? I sure hope so. But for me, it wasn't the best strategy at this point.

My question to the experienced investors here is how accurate are your remodel projections?  How much buffer do you factor in to account for risk when budgeting a deal?  This is really 3 questions in one:  how much more money on average do you spend above forecast? How much longer does it take? Did your property really appreciate as much as you thought it did after? ...and also, how do you know?

I am not against BRRR but I'm not against TK either. Just want myself and other people to be able to manage risk better. It is not just about hustling more.