First BRRRR Questions / Advice / 2023

[Joshua Sun]

Hey all,

It's been a little while since I've been on here. The community helped me find a great real estate agent who helped my fiance and I get our first investment property in 2021. The community also gave some great tips before, during and after getting the property. Kudos again! 

We've been saving for our first BRRRR in the Kansas City, Kansas area with the recommendation our rock start real estate agent. And now we are in the phase of looking at potential deals.

Again we got an amazing real estate agent. They have access to great contractors. We have our bank ready to refinance, great inspector, insurance, property management and everything ready to go. Also we are doing this all remotely. 

Just a few questions for a nervous newbie. We will be using all of our own money for the buy and rehab.

What's the worst thing that can possibly go wrong? Any nightmare scenarios people have gone through on here? Things to look out for?

Are you always looking to add bedroom / bathrooms? So finding big lot size is best? I.E. look for 2 bed / 1 bath and try and make it 3 bed / 2 bath. Or is adding a bed and bath insanely expensive and time consuming? 

How do you more accurately predict rehab costs during your fist one? We have general guesstimates, but feel like without our real estate agent / inspector / contractor to go through before closing, and us doing it all remotely, it feels like a hard guess. 

Interest rates are hovering between 7 - 7.6% and is making it hard to cash flow. I guess a back up is to just sell if it if we can't make it cash flow. Is there anything wrong with holding a BRRRR deal that doesn't cash flow the first year, and is only a few hundred dollars loss versus just selling it?

How do taxes work when when you increase the property value, and then refinance it? 

I hear the best way to learn is to dive in, but we are terrified we could lose a good chunk of our money in this, and have to wait another year or two to try again.

Any answers, advice or encouragement would be great! 

Thanks again to the community!