All Forum Posts by: Dell J.

"10. My favorite one you will finally find a contractor that can do the work at 65-75% of the cost of your other three "quotes. This will be the last happy day of your entire BRRRR.

How to avoid all of this? Traditional financing, light value adds where you leave the equity in the property, and you save for another 7 years to get your second property, and on, and on.

Real estate is a slow long play. People starting with the BRRRR mentality have the wrong mindset from the start.

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I suppose the bottom line in renting to family is whether or not I trust them. If a family member owes me money now and keeps on coming up with a reason why they can't pay, what makes me think they will pay rent on time? OPINIONS PLEASE!

Everyone loves every shiny new object that passes by. When BRRRR was coined, everyone thought it was sliced bread with rosemary, not realizing many of us had been doing that for years and it was just called investing. What are people saying about being against the BRRRR model? You can't really be again it, you can just choose not do it. You can adjust and do what I call reverse BRRRR which is buy with tenants, rent, and wait for it to marinate and then rehab, refinance, but that's leaving more money in the property. I don't really know what you are referring to in terms of people against BRRRR. Investing is evaluating properties and the methods you can use to get them at the best price and make the most money. You use all the strategies over your career.

You should base your return off your purchase price, which is the cap rate, that's a more accurate evaluator of an investment. So if you're making $1500 minimum per month after all your expenses, that's a 4.5% cap rate. ($1500 cash flow x 12 months) divided by $400k purchase price.

Using your out of pocket cash to calculate your return can be dangerous. In your example above you're taking $18,000 cash flow / $80k out of pocket on a $400k purchase = 22.5% return. Pretty good. Now let's say you bought the place for $1,000,000 but only came out of pocket $5k. That would be a 360% return and a much better deal. Gotta factor in the purchase price.