Updated 4 months ago on . Most recent reply
BRRR vs. fix & flip
I want to get started with real estate. I am going back and forth between the BRRR strategy and a fix and flip. what are your thoughts for a rookie? Any advice is appreciated.
1. I have a good amount of cash (100k or more to invest)
2. I want to take a risk but not a huge loss
3. I don't want to rent a property or deal with tenants but I am open to the idea if it is advantageous.
4. I plan to invest in Texas
All advice is welcomed
Most Popular Reply
If you don't want to deal with tenants, dealing with contractors and managing a fix and flip will be a nightmare. Fix and flip and BRRRR are cute terms, but can we call it what it really is? You are buying a disaster of a property that will make you utter the phrase "Why did I think this was a good idea?" about 80 times in the rehab process.
To get a good flip or BRRRR deal, you have to buy at a ridiculously low level, have access to cheap labor, or just get lucky. If you don't have deal sourcing set up or a crew, you're relying on luck as your primary strategy. I just watched a friend and very experienced investor - over 10 years as an agent, buy and hold, and fix and flip investor - lose $60k on a flip in Houston. It's a tough game.
I got started with a live-in flip in Sugar Land. I think that it's a low risk and fantastic way to get into your first deal. You can slowly fix it up over the course of a couple of years and then sell to capture a tax free gain. You worked really hard to save up that $100k. Be cautious in how you proceed.