BRRRR Real Estate Investment Strategy

Real Estate Investment Strategies: Example BRRRR Analysis

In this video and post we are going to analyze a property that was recently advertised on BiggerPockets as a potential BRRRR real estate investment strategy candidate.   In order to perform the analysis, we will be going over: An Overview: What is BRRRR? The Potential Deal What is the 2% Rule? Gathering the Due Diligence Data Verify the After Repair Value (ARV) Identify the Rehab Costs Enter the Purchase, Sale, and Holding Costs Purchase Costs Sale Costs Operational Expenses (OpEx) Modeling BRRRR Financing: Buy, Rehab, Refinance Hard Money Purchase Loan for Purchase & Rehab FHA Conventional Refinance Rental Property Income Capital Expenditures (Reserves) Itemizing CapEx How Does CapEx Affect… Read More

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How to calculate cash on cash and internal rate of return

Why Should Cash-on-Cash Analysis Only Be Used For the First Year of Rental Cash Flows?

The other day I was thinking about how we use Cash on Cash Return (CCR) to filter and compare potential rental property investments, and how that metric is only useful to understand the first year performance of a potential long-term buy-and-hold deal. This post explains the limitation of Cash on Cash Return (CCR) beyond the first year, and why you should use Internal Rate of Return (IRR) to analyze the long-term potential of your rental property investments instead.   Starting at the Beginning: What is ROI? ROI is the rate of return of your total investment.     Generally, ROI is used for short-term investments such as flips where you… Read More

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House Flip Construction Estimate

How Can I Get Contractors to Give Me a Rehab Estimate for a Potential Flip?

This question is often code for: I don’t know how to estimate rehab costs, so how can I get a contractor to help me perform my due diligence on a property by coming up with a Statement of Work (SOW) and estimating it so that I can put in an offer?   The Set Up You have decided to jump into flipping because that’s how you build up your war chest to start using the BiggerPockets BRRRR strategy. You have no construction estimation experience, but you have just found your first distressed property on the MLS, through a property wholesaler, or just driving for dollars, and are dying to get… Read More

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Real-Estate Investment Financing Strategies

6 Strategies for Financing, Refinancing, and Exiting Real Estate Investments

While I’ve been improving the financing section of the REIkit House Flipping Software, I’ve had some time to think about the pros and cons of a few of the different investment strategies that can be used to finance your real-estate fix and flip or buy and hold projects, and eventually get your money back to reinvest in your flipping business, or rental property investments as in the case of the BRRRR strategy. Coincidentally, I’ve recently also had the chance to get into a few debates on the subject. There must be something in the air this week… The following is the list of the most common financing strategies that I’ve been thinking about recently: Strategy… Read More

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