The BRRRR strategy

[Adonis Flores]

Newbie here I'm a nurse that works SWO and plan on starting with the BRRRR strategy I have figured out the math part and I am thinking about putting in sweat equity into the first property. Should I look into a mentor for guidance?

[Stuart Udis]

When I hear posts from new investors interested in any investment strategy let alone the BRRRR strategy who "have the math down" I immediately view that as a red flag because it's not about knowing the math, it's about knowing whether the inputs are accurate. Anyone can manipulate a spreadsheet to make the numbers appear however they need them to look to present a BRRRR transaction favorably. What matters is whether the inputs are accurate and secondly, whether the inputs create a sustainable property operation. Money out and money immediately back in is what happens more times than not and that's because the entire renovation process is designed to prioritize the return of capital. Capex that's not prioritized by an appraiser is left deferred and as soon as the tenant moves in the failing or failed system needs replacement. That's the part of the BRRRR that doesn't get nearly enough attention during underwriting.