BRRRR - Buy, Rehab, Rent, Refinance, Repeat
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Updated over 4 years ago, 09/03/2020
BRRRR Vs Flip - I have read other posts but this is a diff qs
Hello everyone I hope you are all staying safe ! :)
I am new to BP although I have watched almost every podcast episode.
My name is Tatiana Sanchez and I am just getting started with real estate investing.
I have done substantial research on the BRRRR strategy and I would LOVE if you experts could help me understand something.
I am brainstorming if I should enter the "Buy and Flip" world or pursue the BRRRR strategy.
I am well aware that the numbers will always vary depending on the deal and many other factors, but as a rule of thumb, or an industry average, if I am correct, one would take roughly about 6-10 years to earn the same amount of money on a BRRRR deal, than on a Flip if we consider the numbers on the same deal?
Based on several scenarios that I've found online, if i could for example earn $30,000 on a Flip, yet on a BRRRR deal on that same property i could earn $350 passive cash flow, it would take me:
30000/350 = 85.7 months or 7.14 years to net 30k in rental income.
I understand that I should also be considering tax advantages by expensing depreciation on the properties, as well as property value increasing and not having to pay so much taxes on a Flip, but just looking at the net income part, does it really take that long or I am missing something here?
I would really appreciate some examples.
My goal is to earn passive income, so I know BRRRR would be the strategy to pursue but once I realized how long it would take to earn the same amount of money that I would in a 3 month flip its making me go back to the drawing board.
Thank you all very much in advance! :)