BRRRR: leverage and risk post-Covid

[David Banker]

Nothing earth shattering here, but I love the BRRRR strategy.  makes sense to me. I am also ruthless with mitigating risk so I am just curious how investors think about risk and leverage in current environment.  I Imagine much of the vacancy risk is helped by a great property manager who finds quality tenants? Are there additional liquidity strategies outside of having a more substantial cash reserve?

[Jay Hinrichs]

there are a few major risks to BRRR for someone starting out.

1. contractor issues  IE cant get it done  steals money etc.
2. refi  ARV's are not what you think and refi proceeds disappoint you. 

3. lending changes and refi's get super tough

4. seasoning  before you can refi.

back up is to be in a position to exit and break even or make a few bucks..