This approach is cost-efficient and eliminates the complexities of dual-state filings.

BRRRR also assumes you nail the rehab and refinance steps, which can trip up newbies if costs or appraisals don’t align.

We have been doing this constantly in Boise as we are such a high appreication market, but still more cost effective than CA.

A good PM can often get higher rent to offset their cost because they manage at arms length compared to the owner who may be worried about charging market because it’s “too high”.

-While rent would be more expensive month by month, the idea of being able to take my equity out of my home and also being able to reduce annual repair costs, property taxes, etc. does seem appealing to me. 

Determine cost to renovate. 

So I would caution everyone to make sure the replacement cost for your improvements will realistically cover your actual replacement cost in the event of a total loss.

There are also additional costs of operating and maintaining an LLC, like separate bank accounts, annual report filings, tax filings, etc.2.

You should think through how much this will cost with architectural drawings, a good GC, etc.

the value added versus cost to add, especially in single family zoned areas, typically results in a large negative initial position.