BRRRR - Buy, Rehab, Rent, Refinance, Repeat
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Updated over 2 years ago on . Most recent reply

Help me undertand the profits with the BRRRR method
Please let me know if I’m seeing clearly Here? (This is for the Bay Area in California)
-Home is 330,000$ (paying cash)
-Closing cost : Buyer and seller agent fee, Property, title, escrow, misc @7.5 % =24,750$
-rehab cost = 50,000$
-refinance cost: appraisal, closing cost, loan officer fee @ 2.5% = 8,250$
- if I was to get 75% LTV on 580,000$ = 435,000$
- with 25% equity still In the property= 145,000$
So tell me if this is correct. I add up the total cost above, I come up with 413,000$. Now I have 25% equity in the house. I’ve made my original investment back and pulled profit from the deal. Do I also include the monthly rent and my equity in the home for total profit or do I keep those two separate. I am going to continue buying more properties so I was thinking to keep them separate so I know what I can invest towards the next location. Please let me know what you think any advice or criticism is welcome.
-monthly rent income= 2,800$
-property management fees @ 10% of monthly rent = 280$ a month
Most Popular Reply

Seems like my sentiment was funneled through what I think a wise market to be in is, I meant a hold will (typically) weather better than a flip in a correction because you have an additional exit strategy but intended to cashflow until the market comes back up. Personally I follow the tax code and consider a flip as a job and disregard as an investment all together. I wouldn’t personally invest in a market where the tenant laws are such that you can go unpaid for a prolonged period without the ability to evict which is the lens I wrote my reply through. There is never going to be a strategy the works seamlessly for every market.