Rehabbing through BRRRR Method

[Grant Schroeder]

How do you find the point of diminishing returns for rehabbing as part of the BRRRR Method?

[Brent Coombs]

Originally posted by @Grant Schroeder:

@Nicholas Lohr I want to force appreciation into a duplex by rehabbing it as part of the BRRRR Method, but don’t want to spend too much on items that don’t add value to the house. How do I know what to rehab that will directly increase the value vs. rehabbing too much of the house? If that make sense? Thanks for your help!

You start by finding out sold comps value (even before submitting your offer), and work backwards from there. You want your offered price, plus your (expected) cost to bring it to ARV, to come to no more than 70% ARV. (Or 75%, if you have a good lender who'll refi at least 75% ARV). It'll be different for every property. Work out what your niche specialties are for adding lots more value to properties than their cost to you. Good luck...