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Updated over 5 years ago on . Most recent reply

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Jason Malabute
  • Accountant
  • Los Angeles, CA
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Repair items that ruin brrrr deals

Jason Malabute
  • Accountant
  • Los Angeles, CA
Posted

I have question about BRRRR. I'm going to do my first brrrr deal. I understand that you can technically make any repair item work with BRRR as long as you are all in at 75% of ARV (assuming you're getting a really good purchase price discount). But assuming you're getting an average discount on a distressed property what type of big item repairs (foundation, plumbing, electrical, etc) would be a red flag and a deal breaker for a brrrr deal in Indianapolis?

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Will Barnard
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  • Developer
  • Santa Clarita, CA
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Will Barnard
Pro Member
  • Developer
  • Santa Clarita, CA
ModeratorReplied

Individual specific rehab items don't ruin a BRRRR deal, it all comes down to what the total cost plus acquisition is and then the ARV. The numbers either work or they don't. I wouldn't be concerned about what items to stay away from per se, but more, do all the rehab expenses needed plus the purchase price make this deal worth doing.

Obviously you need to not miss anything major like foundations, roof, mechanicals, plumbing, sewer, electrical, etc which is why you should always get it inspected and have an inspection contingency with you offer.

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