Risk question regarding BRRRR

[Nathan Klym]

Hi all,

I have been studying the BRRRR method for a couple of months now and am moving pieces around to start and execute on that strategy. One question I had was - Regardless of location, what happens if the market goes south due to political / cat event / bubble activity… and house valuation decreases. Even though you may be able to overcome the gap with constant renters, you run the risk of being over leveraged if you have 75% LTV on multiple properties. Usually, the lending is in the same geo as the investment, so in this instance, it could be the bank or lender being in trouble causing you to have your margin called. Just looking to get some feedback on this as I have been mulling it over.

Thanks in advance!