BRRRR investor horror stories.

[Austin Cooke]

I have heard all the good about the BRRRR strategy. I'd love to hear some of the bad. Especially in today's markets with renters not being able to afford rent and air bnb booking contracting from nearly 600,000 booking a week in the US, to roughly 100,000 as the current pandemic weighs on travel and employment. Numbers sited from- ( https://www.zerohedge.com/personal-finance/holy-god-were-about-lose-everything-pandemic-crushes-overleveraged-airbnb ).

I am hoping to use the information or "horror stories " in this forum paired with the good stuff that I've learned to give to my girlfriend so she understands what I'm getting us into.

To my fellow bigger pockets folks that are feeling the repercussions of the current state of our economy. My prayers are with you. We will come out stronger than before. Let's use this as a learning lesson for generations to come.

[Joe Aiola]

@Austin Cooke First off, smart move running it by the girlfriend first! ;)

As I'm sure you know, any type of investing comes with risk. It's our job as investors to try to mitigate the risk as much as possible. The BRRRR strategy is no different. The biggest risks, as other people have already mentioned, are underestimating rehab costs, low appraisal for the ARV, and knowing you can get the loan on the refinance.

You can make sure you're working with an investor-friendly agent to feel more confident on the ARV, and you can get pre-approved by a few lenders to feel confident on getting the loan on the refinance. These are just two examples of how you can mitigate some of that risk.

With the uncertainty of the market, I would just analyze conservatively. You may have to make more offers this way (because they'll be lower than normal), but it gives you a little extra cushion. No deal is better than buying a bad deal, especially with the current situation.

I know this isn't a "horror story" like you asked for, but just wanted to give my opinion. 

Best of luck!