Brrrr or ROI - which is better?

[Anika Hartman]

Hi there!

We are looking to buy our first investment property however we live in a place where real estate is expensive and it really holds its value. So in other words even rehab properties are up there in price. This is making it hard for a Brrr to work. However we found a property that already has 2 rentals making our ROI about 16%. So question is - how do we make Brrr possible in our market or do we buy the property with high ROI? Any suggestions of other strategies? I would appreciate any advice!! Thanks in advance!

[Greg Dickerson]

Originally posted by @Anika Hartman:

Hi there!

We are looking to buy our first investment property however we live in a place where real estate is expensive and it really holds its value. So in other words even rehab properties are up there in price. This is making it hard for a Brrr to work. However we found a property that already has 2 rentals making our ROI about 16%. So question is - how do we make Brrr possible in our market or do we buy the property with high ROI? Any suggestions of other strategies? I would appreciate any advice!! Thanks in advance!

This one is really up to you. What returns are you after? The housing market is at all time highs so In order to find good deals below market so you can force appreciation you need to go direct to seller so that requires a marketing strategy and systems to respond and follow up. You can build equity slowly with stabilized assets through principle pay down and general appreciation but when the market turns all the equity can be lost so it's all about cashflow at that point. So at the end of the day are you OK with a 16% COC if all equity is gone and the property is worth less than you paid for it at some point?