If you’re not ready to pivot into that mode, and you don’t have a sizable cash cushion, and the deal isn’t priced right for the actual condition, don’t be shy to tell your agent that you’re backing out based on inspection results.

I have pretty high equity cushions in each property, so I can absorb a pretty good value drop, but even if my properties did go underwater, One hidden benefit of using this BRRRRR strategy is that each property is top notch and desirable.

Find discounted properties not just be a retail investor so yiu have an equity cushion as well as a quick exit strategy.

This fully funds the rehab/purchase and gives an extra 10% cushion if needed, if never used it is subtracted from final loan size at completion.An option that may work for some in the right circumstances, especially a buy & hold but fix & flip works too.

Before getting started I recommend reading the Total Money Makeover and making sure you have no personal, consumer debt and that you have at least a 3 month cushion in savings.

Colorado is overpriced, but, you can still do your due diligence and try to find one Deal at a time to fix up and manage to create a cushion with Sweat Equity and Personal Management while you wait for this Real Estate Market to collapse when the Fed raises the interest rate.

If you do move forward on one make sure you have a cushion, figure longer hold times and lower ARV. 

I would suggest that it makes sense to keep the money in the bank as an emergency cushion against those times where you might need the funds but are not able to borrow at all. 

However, rates were already incredibly low and the problem with the unfettered QE during boom times is that it does not allow for as much cushion or tools during times like now. 

Some investors prefer to put more money down as it gives you more cushion in the event of your property value dropping and other life events occurring that would require you to sell.