As an example. I buy a house using the BRRR strategy for $40,000, the cost of materials is 20,000 and it appraises for 100,000. Each of the 4 contractors has $10,000 in equity plus the cash flow and appreciation. My equity is at 60,000 plus the appreciation and cash flow. They don't have to manage the property or do anything unless something needs fixed in their specific field. They are simply out the labor/time but payment for that is the equity which pays far better than the day or two of labor. The hope is that it produces a repeatable process with built in relationships that will allow to buy rehab and refinance quicker and with better quality with little to no labor cost. I guess I'd rather have a half a watermelon than a whole grape.
