BRRR- Renovation portion

1 Reply

Anyone using the BRRR method, to what extent are you doing the renovations? Are you doing them to retail quality, or nice but rental quality? How do you know if rental quality will make it appraise for enough to refinance?

This is a tough question to answer because some appraisals are more art than science.

Generally speaking the higher quality materials used, better workmanship and look of the end product will produce a higher ARV.

However, you have to know your comps and your numbers. If you over build for a neighborhood you are going to reach a point of diminishing returns.

Your best bet is to let the numbers decide to an extent what you should do.

If the comps are lower and you have a smaller margin, only do what has to be done to have a finished product. If you have a higher ceiling on the end price, go for higher end finishes.