BRRR strategy upgrades with HELOC

[Sean Harris]

Hey Bigger pockets community I have a question for you in hopes of clarifying a few things. I just recently got approved for a HELOC loan on my current residence and want to use this money to start buying SFRs utilizing the BRRR strategy. My question to you is, in your opinion what is the best way to upgrade the home, somewhat inexpensively so that I can get a cash out refi to then pay my HELOC loan back off so i can repeat this over and over again? Thanks

[Patrice Penda]

@Sean Harris
To answer your question, i'd probably say kitchen and bathrooms are quite  value-add upgrades (not always)

But a word of caution. With the BRRRR strategy, the saying "You make your money when you buy, not when you sell" could not be truer. If you pay too much, you could end being stuck in a situation when your local market doesn't support the resale price you would need to achieve in order to repeat the process.
In that scenario, improvements might not help. In fact, they could make matters worse by you throwing good money after bad money.

When implementing the BRRRR strategy, your purchase price in critically important. You need to buy well enough so that you can improvement works that will increase the value of the house to a level where you can refinance and pull out your initial capital.

And you also need a good grasp the repair costs in general.