The BRRRR method is foolproof! Right?

[Zach Hoereth]

I wrapped up the week having a conversation with an out of state investor interested in purchasing a few properties that would fit the BRRRR criteria. I have found myself having the same conversation time and time again with investors who are in search of these dilapidated properties in which they can go in and add a bit of value to pull all of their cash out and then some. While in theory this sounds great, I have now come across multiple investors in the last couple of months who have lost their shorts to say the least.

I share this because as a local I know how hard it is to find decent labor at this time in the market. Not only are individuals having issues, but larger property management firms are struggling with the labor shortage as well. I am witnessing out of state investors purchase "BRRRR properties" for tens of thousands of dollars over what they should be purchased for. Just because a property is being bought "off market" does not always mean that you are getting a deal. Make sure you do your due diligence and get a few bids on the project prior to pulling the trigger. Don't be the guy/gal that has to throw together a sloppy remodel and complains to your contractor(s) that the final figures are too much simply because you made a mistake on the front end by paying too much.

That said, there is nothing wrong with purchasing buy and hold properties to get your foot into the market. Upon gaining some confidence and learning who some of the reliable vendors are, then perhaps take a stab at doing one.I am not saying that I am completely opposed to the BRRRR method, but I would suggest having all of your ducks in a row before doing so. Get a great team behind you so that you are not shooting in the dark. If you are in the Indianapolis market reach out to @Ross Denman he will shoot it with you straight, similar to how I do.  

Cheers,

Zach