First Houston BRRRR / Flip

10 Replies

I haven't posted in this section BP yet.  Now seems like a good time!

This is the first investment property (Jan 2012) that my wife @Jamie Bounds & I bought in Houston. Without knowing the ridiculously long acronym at the time, we used the BRRRR (buy, rehab, rent, refinance, repeat) strategy. Since then the market has gone up dramatically (woohoo!) so we decided to cash out and use the proceeds to do more deals.

Here is a quick rundown on the details (numbers rounded): 

Deal type: pre-foreclosure
PP: $85k (100% hard money)
Rehab: $35k ($27k was hard money)
Rent: $1395 - $1450
Rehab 2: $31k
List Price : $234,900
Profit: Depends on the final sales price, but it will be a nice check to deposit.

Here are a few pictures.  

2012 Before (I wish I could attach the house smell to these)

2012 After (Clean & Basic remodel for a rental)

2015 After (Added the premium touches)

I wish we bought a lot more of these in 2012!

@Chris Bounds

I want to thank you for posting this. I recently stumbled upon the BRRRR formula and thought it was pretty neat but had a hard time conceptualizing it, in particular the refinance after rent. So the pictures and and price details have helped me understand the process a little more. Thanks and best of luck on your next project.

Are you going to do a 1031 with the proceeds?  Usually that isn't an option with a flip, but since you improved it after it was established as a rental/investment property it might be an option.

The BRRRR model would be much more conducive to completing a successful 1031 exchange than a more hasty flip n flip. The primary intent of the investor must be to hold for productive use. This model seems to indicate that the primary intent was to buy rent and hold. The decision to sell is after the fact. We've also seen the first two Rs reversed where the property value was in a rent as/is and then when ready to sell spruce it up so it shows the best.

Free eBook from BiggerPockets!

Ultimate Beginner's Guide Book Cover

Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!

  • Actionable advice for getting started,
  • Discover the 10 Most Lucrative Real Estate Niches,
  • Learn how to get started with or without money,
  • Explore Real-Life Strategies for Building Wealth,
  • And a LOT more.

We hate spam just as much as you