BRRRR method question

[Michael Nolan]

In theory, can you BRRRR any property that needs small upgrades and isnt for sale at a discount price? For example, if you are looking to scale your portfolio with the BRRRR method but cant find deals that are discounted, could you do upgrades to the house (new front porch, kitchen, bathrooms, extra bedroom, finished garage/basement etc)?

[Jon Kelly]

@Michael Nolan Yes, it's a similar concept. BRRRR method utilizes the equity "trapped" in the property. Your equity is increased when the value of the property increases. One way to increase the value of the property is to "force appreciation" through upgrades you mentioned.

Just make sure the value of the property increases enough to make the refinance worthwhile. For example, if you upgrade the kitchen and the value of the property only increases $5k, it's not worthwhile to incur additional closing costs when you refinance.