BRRRR strategy: A Love Hate Relationship

[Tyler Haskell]

Does anyone else see the same major flaw of the mystical BRRR strategy? At the end of the day, arguably the most important element or phase of the BRRR process is the refinance to get your exit money. And the appraisal from the lender of your choice is the single event that tells you whether you successfully complete the BRRR. Along every other step of the journey YOU have control. You research the ARV of the property, you project the rehab costs, you pull comps, you negotiate purchase price, you oversee repairs, you rent it out, and then likely, you wait for your purchase to season and then initiate the refi and hope to get your cash back (assuming you purchased with someone else's money, otherwise it's immediate). This is where suddenly the control and your fate is pulled away from you and put in the hands of an appraiser. These appraisers are most likely not investors, and most do not even understand the concept of buying discount properties. So while I prepare a nice packet for them with my rehab, how I acquired it discounted, and what I think it's worth, at the end of the day you have to hope that they will agree, other wise your coming up with the difference in the 75% LTV. I understand you can order a re appraisal and try to get it fixed, but at the end of the day this is still a wild variable that you really cannot control, only influence to the best of your ability. And the experience will be different every time! Anyways, I do it, I still think it's one of the best investing strategies out there, but i wanted to see if anyone shared the same nerves I get when ordering these appraisals for a refinance!