How to Buy / Renovate / Rent / Repeat

Question

Currently my wife and I own two homes, but see some opportunities to purchase properties near us that need some renovation.  I know that there are some loans out there that you can purchase a home and include renovation costs in your loan. Was wondering if someone could point me in a good direction for some reading materials to make me more literate in the process or could help in in muddying the waters on how you could purchase, renovate, and rent it out while making it a positive cash flow.  Maybe I’m asking too much…mostly looking to better educate myself?

Trevor Schmitt · Answer

BPs very own David Greene wrote a book on this topic: "Buy, Rehab, Rent, Refinance, Repeat: The BRRRR Rental Property Investment Strategy Made Easy" Other than that, the Bigger Pockets podcast has been one of, if not the best source for educating myself throughout the years. Go through their list of episodes and you will find many going into great detail on the BRRRR strategy.

Jason Pera · Answer

When I see a rehab property I am looking for repaint, reface cabinets and paint cabinets. Maybe new back splashes and table top, new doors if needed and trim to give the house a new look without doing too much. Most properties I have been looking at…I normally just watch and see what they go for as I am not too comfortable with fully engaging in the real estate market because I don’t fully know what I am doing.  I do notice a lot of ADU’s going in because housing is an issue where I currently live and people are also turning a single family home into two separate units.  There seems to be a lot of opportunity, but like I said I need to learn more to feel comfortable diving into real estate investing.

Jaron Walling · Answer

@Jason Pera "but see some opportunities to purchase properties near us that need some renovation." - What is the definition of renovation in your mind? What level of rehab are you comfortable doing? What happened to the properties you looked at? What strategy are local investors using?

If you're aiming to BRRRR you need to buy property like a flip. Every flip should have a chance to be a BRRRR. It's only possible if you buy it right (below market) or the market appreciates during your hold period, or ideal a bit of both. The elephant in the room is finding/buying/creating deals that actually work.