Is the “stack” method effective?

Question

Is the stack method actually effective if used correctly? I’ve heard many peoples opinions stating it’s unrealistic and such. Let me know your thoughts on it.

Frank Wong · Answer

Hi Derek,

I don't think that will be sustainable once you get to pass a certain number.  I think a better interpretation of a STACK method would be. You buy a house get it rented out.  Now you work like hell and stack cash for a down payment on the next purchase. Then repeat stacking cash until you are happy with the end goal.

Mike Dymski · Answer

Internet slang for age old strategies

BRRRR = add value and tap into it

Househack = have roommates

Stack = grow/scale your portfolio

Account Closed · Answer

@Timothy Howdeshell Stack method is when you start with a 1 unit and double the amount of units you buy each year. So let’s say first year you buy a single-family home, next year you buy 2 units like a duplex and the year after that you get a 4-plex and so on. And to finance these investments the recommended strategy by Brandon Turner is using BRRRR.

https://www.biggerpockets.com/renewsblog/build-real-estate-portfolio-fast-the-stack/

Justin F. · Answer

It's really not a method, more of a 'suggested trajectory'. Go at your own pace @Derek John, there is no secret sauce of volume growth- it's certainly no secret that it's a lot easier when you're big enough to hire people to help!

Timothy Howdeshell · Answer

I'm not sure what this method refers to. Can you please expand on the stack method?

Also, whatever it is, I'm sure it works. But not everywhere, all the time, and for everyone. There are countless methods/strategies. It is all about identifying which one(s) you can get to a satisfactory level of success with initially, and then expand from there. That success is also something you have to define for yourself.

Sam B. · Answer

Isn't that just a fancy way of saying that as you make more money you should invest it?

Samuel Duckett · Answer

Hey Account Closed, thanks for posing this question as I was searching through BP to find the same question answered. It sounds to me like “the stack” is very effective as a target and ideal rate of growth. One of its most notable characteristics is that it is difficult, which is partly why Brandon Turner recommends it, since it constantly keeps you as an investor growing by keeping you “uncomfortably challenged,” in a good way. So while I unfortunately don’t have feedback on how realistic it is to accomplish, it does seem like in the least, it is an ideal that is worth using as your target and pursuing relentlessly.

Account Closed · Answer

@Frank Wong So basically what you’re saying is follow the stack method but it won’t likely be yearly purchasing of double the units from the past purchase?

Sam Shueh · Answer

If the market or local economy can support it.  Right now the flippers can not even get 10% return with home prices that appreciated locally just +1% last 12 months. We have almost no unemployment to speak of in Silicon Valley as we speak.  When Wall Street professionals start debate when the recession will arrive, listen attentively and have contingency plans put it place.

Is the “stack” method effective?

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