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Updated over 4 years ago on . Most recent reply

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Selling my hypothetical house hack? How feasible is BRRRR?

Joseph Griffith
Posted

Is it not difficult to have a positive cash flow from a house hack? What the heck do I need equity for? So that thirty years later I can have a significant cash flow? That's useful, but what if I want to retire way sooner than thirty years from when I buy a property? What good does a home appreciating do if I'm not going to sell it? Can a house hack without significant forced appreciation---within reason---be worthwhile if I sell ten or fewer years after the purchase?

How feasible is BRRRR with a full-time job and with no experience in real estate if I'm a hard-working, number-crunching person? Should I rent my hypothetical BRRRR property until I I can and want to retire to get the most out of the appreciation and rent going towards equity?

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Nicholas L.
#3 Starting Out Contributor
  • Flipper/Rehabber
  • Pittsburgh
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Nicholas L.
#3 Starting Out Contributor
  • Flipper/Rehabber
  • Pittsburgh
Replied

@Joseph Griffith I am not sure why you are so focused on equity; that's only one point of a house hack. Think about it this way. You buy a duplex using an FHA loan and live in one side, which lets you put way less down than if you used conventional financing.  It may or may not cash flow.  You build equity for a while.  Then you move out.  Now it's cash flowing (because both sides are rented out) and you have equity.  You move on to the next one.  Does that make sense?  Equity is only one factor of real estate investing.

@Jimmy Lieu that's right.  Except I wouldn't say that the property appreciated, you forced the equity via a rehab. And, as you might expect, it's very tough to find a property to buy for $100K that only needs a $10K rehab to take it to a $150K ARV.

  • Nicholas L.
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