Do BRRRR numbers work in the GTA?

[Alexandru Oprea]

Hi everyone! I’m fairly new to real estate investing and am currently absorbing as much knowledge as  I can for when I am ready to purchase my first investment property.

Amongst other books I've been reading the BRRRR strategy book and I input some numbers for a (very rough) example deal potentially found somewhere in the GTA as follows:

House ARV $600,000

To apply the BRRRR strategy at 75% of ARV value, the property would need to be all in for no more than $450000.

A further breakdown could look something like this

68% - $408000 actual purchase price

5% - $30000 renos

2% - $12000 other costs

So my question is: is it realistic/possible to purchase a home for $408000 and then using only $30000, bring it up to $600000 in Ontario?

As far as I know, especially now post pandemic, renos are quite expensive, with a kitchen alone eating up the entire reno cost. The way I see it, if you buy it for less, you likely need a SUBSTANTIAL amount of reno thus throwing off reno cost, or if you buy it for more, there’s not much to rehab and profit from. Is it just a matter of strategizing (finding cheaper materials, wholesaling well etc.), or are my example numbers wayyyy off?

Thanks so much in advance for any insight!