Is BRRRR Still Viable After the Interest Rate Hike? Seeking Course Recommendations

Program/boot camp with accountability coaches, weekly calls, etc.

Eliott Elias

Investor · Austin, TX · Member since 2021 · 9k+ posts · 5k+ votes

BRRRR is still possible, you need more skin in the game for the property to cash flow.

Greg Kasmer

Rental Property Investor · Philadelphia, PA · Member since 2021 · 778 posts · 504 votes

Artur - You should check out the Bigger Pocket fall bootcamps. Registration is active until 8/31/23 and registration can include a Pro Registration!

Artur A.

OP

Member since 2020 · 78 posts · 27 votes

Quote from @Eliott Elias:

BRRRR is still possible, you need more skin in the game for the property to cash flow.

could you elaborate more please?

@Eliott Elias

Michael Mackney

New to Real Estate · Long Island · Member since 2021 · 55 posts · 19 votes

I've used the BRRRR strategy for myb latests investments. You just have to do a little more due diligence than normal to make it still cash flow. You would probably need to take on a lower LTV at the refi stage to make your mortgage payment less to offset the higher interest rates.

David M.

Morris County, NJ · Member since 2020 · 5k+ posts · 2k+ votes

@Artur A.

There was a thread probably now a year back... Its pretty rare/tough to get that "perfect" brrrr. You heard the handful of stories on how great it is, but you don't hear the tons of stories where it worked out partially.

At best, you need to find under priced deals off market --- you make your money when you purchase, not when you sell...

From what I've heard, these paid programs aren't really worth it. The information is out there, most of the time for free or maybe the cost of book (it could be electronic if that is your preference). Other investors will tell you; perhaps try connecting through your local REIA.

The big part is the lead generation. That's basically a "sales skill." That's where it all starts. Of course, other skills are necessary too.

Hope that helps some. Be happy to chat. Good luck.

1 Reply

Andrew SyriosPro Member

Moderator

Residential Real Estate Investor · Kansas City, MO · Member since 2014 · 10k+ posts · 5k+ votes

Podcast Guest on Show #121

Technically, yes, but it's much, much harder than before verging on not being viable. Flipping and equity deals still work, of course. But with interest rates as high as they are and prices more or less stable, it's very, very tough. We've really been focusing on improving our systems and completing all old rehabs right now as acquisition isn't high on the list for the time being.

Bob S.

Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes

Quote from @Artur A.:

Hello BP community! 🏡

With the recent rise in interest rates, I've been pondering the viability of the BRRRR strategy.

I've noticed a lull in discussions about successful BRRRR stories lately. For those who are actively investing, are you still implementing the BRRRR method in this new financial climate? I'd love to hear about your experiences and any adjustments you've made to your strategies.

On a related note, I'm also looking to further educate myself. I'm aware of the Nate Barger Academy (its about 5k fee), but I'm curious if there are other bootcamps or courses out there that you'd recommend for someone keen on diving deeper into real estate investing.

Thanks in advance for sharing your insights and recommendations. This community has always been a goldmine of knowledge, and I'm eager to learn from all of you!

Short answer yes. I get deals all the time with 15- 20% net caps based on cash. So if ref COC would still be about 10% COC. Also just go to your local RE meetings, and do not waste money on courses.

Good luck

Robin SimonBusiness Member

Lender · Austin, TX · Member since 2022 · 5k+ posts · 4k+ votes

Quote from @Artur A.:

Hello BP community! 🏡

With the recent rise in interest rates, I've been pondering the viability of the BRRRR strategy.

I've noticed a lull in discussions about successful BRRRR stories lately. For those who are actively investing, are you still implementing the BRRRR method in this new financial climate? I'd love to hear about your experiences and any adjustments you've made to your strategies.

On a related note, I'm also looking to further educate myself. I'm aware of the Nate Barger Academy (its about 5k fee), but I'm curious if there are other bootcamps or courses out there that you'd recommend for someone keen on diving deeper into real estate investing.

Thanks in advance for sharing your insights and recommendations. This community has always been a goldmine of knowledge, and I'm eager to learn from all of you!

Yes - there are still quality deals out there, but is tougher and should focus really hard on the "Buy" part and getting a great under-market purchase. Whats not really viable now is using conventional loans for the refinance (Agencys extended cash-out refinance seasoning minimum to 12 months in April) so alternative financing options for the refi is necessary (waiting 12+ months to refi defeats the purpose of BRRRR IMO)

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John Chong

Lender · Houston, TX · Member since 2023 · 235 posts · 255 votes

Its still possible to find a good BRRRR with todays rates. You'll want to spend more time acquiring the right property to make sure you have enough margins to cash out of your BRRRR. Keep in mind you're looking to build a long term portfolio and you can always refinance to get better cash flows once rates normalize.

Jaron WallingPro Member

Rental Property Investor · Indianapolis, IN · Member since 2018 · 4k+ posts · 4k+ votes

@Artur A. In our mid west market (historically a cash-flow area) it's been really challenging. We have only completed long or short term BRRRR type deals because I believe its the bread and butter of my market. Most of our properties were purchased distressed and below market.

I'll be honest. My wife and I are sitting on the sidelines. Market rent has leveled out, prices are high, and interest rates even higher. The last property we purchased was in winter of 2022. Rates were going up already and like @Eliott Elias mentioned we had to trap a lot of money in the deal. I'm happy with the cash-flow but we effectively lost $20k for the next opportunity. From my experience and limited funds we can't continue doing that and grow a portfolio.

Nick BelskyBusiness Member

Lender · Orlando, FL · Member since 2021 · 1k+ posts · 704 votes

@Artur A.

I work with clients all over the country and Fix and Flip loans have done nothing but pickup this past year. Many lenders have begun to gain more confidence in these markets and are gradually lowering rates and increasing leverages again. Just a few months ago, there were only 3-5 lenders I knew of who would go up to 90LTC, now there are easily a dozen. Rates were 12-14%, now we are starting to see just under 10%, mostly in the 10's and low 11's. Those are positive movements.

With that said, many markets have begun to soften and the perm financing has become more of the concern as properties simply aren't cash flowing enough to support the higher LTVs that investors hope to achieve to recoup their initial investment. From my experience, I've not seen appraisals come in low in TX, FL, AZ, WA, NC, or GA. They are still appraising well. Other states have begun to see some softening. That also depends on the market as well.

I am still seeing some perm refinancing cash flowing well enough for 80LTV cash outs too. Not nearly as many as 2 years ago, but usually the insurance costs are hitting harder than the rate impact to PITIA. Increases in insurance premiums and taxes have caught many by surprise more recently than rates, IMO.

Cheers!

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