2026 BRRRR Strategy
Investor · Indianapolis · Member since 2025 · 5 posts · 8 votes
2026 BRRRR Strategy
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Kenneth GarrettPro Member
Investor · Florida Panhandle/Illinois · Member since 2016 · 4k+ posts · 3k+ votesReal Estate is frustrating. That is the message here. Finding the right deal and executing the plan always has some hurdles to jump over especially when it involves rehabbing property.
I’ve been in this for 15 years, clearly not as long as others, but it takes persistence to reach whatever your goal is. What I’ve noticed, the goal post are always moving. Once I get close to a goal, I generally re-evaluate the goal and update it.
I've stayed in the 1-4 unit arena. My go to is SFH. Easier to deal with problems, easier to sell if need be, better tenants then multi ( based on your area, try to stay in C+/B areas), tenants stay longer and the profit is solid.
Hang in there. We are all trying to figure this out as the things change. The only constant in life is change.
21 Replies
- 10moRyan SpathBusiness MemberReal Estate Agent · Boise, ID · Member since 2017 · 580 posts · 379 votes
Nick, I think this is actually a pretty common feeling, especially in a couple of scenarios.
First, when there isn’t a really clear why. If the “why” is strong enough—whether it’s time freedom, optional work, or long-term family security—it’s often easier to push through the inconveniences when they inevitably pop up. Real estate is rarely passive in the early and middle innings.
Second, being undercapitalized or having false expectations. This business, like any business, is capital-intensive. Large repairs, vacancies, or unexpected issues aren’t if problems, they’re when problems. If those aren’t planned for, it can feel overwhelming very quickly.
For my family and me, this is a business that serves us—not the other way around. We have very clear monthly and annual cash-flow targets the portfolio needs to hit. If those milestones aren’t being met, we step back, analyze what’s off (management, pricing, leverage, asset type, etc.), and make adjustments rather than walking away from the model entirely.
That said, shifting strategies doesn’t mean quitting—it might mean refining. Fewer properties, better locations, stronger margins, or even different asset classes. I think 2026 will be a year where a lot of investors get more intentional rather than more aggressive.
- 10moKenneth GarrettPro MemberInvestor · Florida Panhandle/Illinois · Member since 2016 · 4k+ posts · 3k+ votes
Real Estate is frustrating. That is the message here. Finding the right deal and executing the plan always has some hurdles to jump over especially when it involves rehabbing property.
I’ve been in this for 15 years, clearly not as long as others, but it takes persistence to reach whatever your goal is. What I’ve noticed, the goal post are always moving. Once I get close to a goal, I generally re-evaluate the goal and update it.
I've stayed in the 1-4 unit arena. My go to is SFH. Easier to deal with problems, easier to sell if need be, better tenants then multi ( based on your area, try to stay in C+/B areas), tenants stay longer and the profit is solid.
Hang in there. We are all trying to figure this out as the things change. The only constant in life is change.
- 10moStuart UdisPro MemberAttorney · Philadelphia · Member since 2018 · 2k+ posts · 3k+ votes
Hey Nick, I am going to make an assumption that these are lower barrier inexpensive single-family homes. Now a question for you: If you were to put the homes you purchased and renovated this past year on the market, will you achieve sales results that mirror the appraisals that were relied upon to obtain the BRRRR financing?
I am asking for an honest assessment because most investors in your shoes don't take into account the transactional costs associated with exiting these BRRRR rehabs. Namely who is the buyer...is there even a market for owner occupants or are the only natural buyer's other investors? The investors will automatically want a discount. Both owner occupant buyers and investors (particularly owner occupant buyers) will scrutinize the renovations, and the home inspection reports are very unforgiving with lengthy repair addendum lists. Expect seller assist concessions as well. Then layer on ordinary transactional fees such as brokerage and transfer taxes and very quickly 12-15% of the appraised value is wiped away. That's on top of a very time demanding process with a ton of back and forth trying to get these types of transactions to closing.
Unless these homes have meaningful appreciation potential and that appreciation can be realized rather quickly because these homes are rarely sustainable for the long term, investors like yourself work extremely hard for appraisal equity that's sadly never realized.
This strategy will continue to be pushed onto investors like yourself because there are fees to be earned, just not by the owner of the real estate. Contractors, brokers, lenders, turn key providers, PM's all collect fees using investors like yourself to serve as the conduit. Essentially, you're borrowing money from banks and lenders collateralized against lousy real estate to pay all of these transaction participants salaries.
It’s good that you’re starting to recognize there may be better opportunities out there. Consider focusing on quality over quantity, and on real estate with strong fundamentals that can do some of the heavy lifting for you. In those types of transactions, everyone is usually compensated—but most importantly, the owner of the real estate. - Investor · Bridgeville, PA · Member since 2017 · 27 posts · 16 votes10mo
Hi Nick, I recently went through this process with two SFH homes. I spent a significant amount of time (probably too much) being picky about where and what I bought to ensure the properties were in neighborhoods with high appreciation potential and strong cash flow. The difficulty of this is that these deals are few and far between, often require a lot of work up front to get the desired rent I need and then can sit on the market for months due to lower rental demand in these areas.
I'm willing to do the work and wait a few months, because I know families in these areas are likely to stay for years, so turnover is minimal. I'm finally adding a duplex to the portfolio next month, but for me, SFH are worth the "headaches" when I'm cash flowing $1,000+ per door on a monthly basis.
- 10moJaron WallingPro MemberRental Property Investor · Indianapolis, IN · Member since 2018 · 4k+ posts · 4k+ votes
@Stuart Udis I agree with most of your statement but where are the better opportunities?? We own a handful of SFR (prior BRRRR deals) and decided to flip a property earlier this year.
We're still on market. Where did the buyers go? Throughout my investing journey people have preached about this type of property; fringe area C class, that creates CF. This house is sub $200k in a C/C+ class across from a park. Other than the price (honestly a bit high) and time of year something feels off in this market. We can rent it out and CF but that tracks with what your saying. The transaction costs eat equity "profit" just so we can produce $150 per month in CF. It's a first world problem but idk what else to do if it doesn't sell.
Is the starter home/BRRRR deal dead in 2026? It feels like our buyers are broke or "stuck" in there current situation. Either way it's not creating offers for my property. Higher priced suburban homes are moving quick because those buyers can afford to move. Maybe that's where we should focus our attention in 2026. Maybe we should eat some popcorn on the sidelines. You tell me. Cheers.
- 10moNicholas L.Pro MemberFlipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
my answer: no. just continuing to be picky about deals. I still like single families. I only buy on BRRRR or seller finance. If I can't BRRRR it or seller finance it, I ain't buying it. Are other people up to their eyeballs in cash for giant down payments? Because I'm not.
you nailed it. transaction costs. I try to mention this every time I'm talking to a new investor.
- 10moStuart UdisPro MemberAttorney · Philadelphia · Member since 2018 · 2k+ posts · 3k+ votes
@Jaron Walling Your question highlights a broader issue many investors face. This isn't meant to be disparaging, but most investors buy what they can afford, which often pushes them toward lower–barrier priced point markets. At the same time, real estate investing advice has largely narrowed into three dominant paths: BRRRR-style single-family homes, buying real estate with 100% financing or large apartment syndications. Just look at the BiggerPockets forums or scroll through social media. In between those extremes is a wide range of quality assets that tend to be overlooked. In fact, investors are often taught to dismiss properties in that middle ground, especially those listed on the MLS under the assumption that if a deal isn't "off-market," it can't be a good one.
With the sheer volume of content online, the same approaches are repeated put in front of people interested in investing in real estate over and over, and investors become conditioned not to look elsewhere. I’m not suggesting someone jump from owning single-family homes to syndicating large apartment deals or raise outside capital....we've seen how that has played out for both GPs and LPs but there are far more practical middle-ground options.
One such option is partnering with family or friends who share similar goals and, instead of each person buying a separate single-family home, pooling resources to acquire a stronger asset. If that’s not feasible, local REIAs or networking groups can be a good way to meet others interested in pursuing a similar strategy. By that, I don’t mean one person providing capital while the other performs a service. I mean two individuals who each have the capacity to buy real estate independently but choose to combine capital and balance sheets to pursue a better asset than either could acquire alone.
- 10moJaron WallingPro MemberRental Property Investor · Indianapolis, IN · Member since 2018 · 4k+ posts · 4k+ votes
@Stuart Udis 100% agree with that statement. My frustration with the market is pushing us away from buying more single family. The CF can be created but we're trapping a lot of $$$ to make it happen. We have the resources and contractor support to do bigger deals.
I need to look inward and set different goals for 2026. There's probably other investors here feeling the same frustration.
- 10moAlfath AhmedBusiness MemberReal Estate Agent · Columbus, OH · Member since 2022 · 1k+ posts · 1k+ votes
Quote from @Nick Morrison:
After buying my fourth investment property this year and dealing with tons of headaches over the last few years I'm starting to rethink buying single family investment properties next year. Wondering if anyone else is feeling the same and what their game plan for 2026 is.
Anyone else making a shift in 2026?Single family works very well if you buy it in the right areas and at the right price. Typically you want to have a good bit of spread when you buy. When you re-sell, make the property very nice and sell to people's emotion (making sure you are staying within comps).
ReafCo | Ahmed Group 533 Reviews - 10moJimmy LieuBusiness MemberReal Estate Agent · Columbus, OH · Member since 2019 · 3k+ posts · 2k+ votes
Quote from @Nick Morrison:
After buying my fourth investment property this year and dealing with tons of headaches over the last few years I'm starting to rethink buying single family investment properties next year. Wondering if anyone else is feeling the same and what their game plan for 2026 is.
Anyone else making a shift in 2026?Hey Nick, I hear you—after a few properties, the headaches can definitely make you rethink the whole single-family strategy. A lot of investors in a similar spot are shifting toward small multis or even looking at out-of-state markets where the cash flow and appreciation potential are strong but the day-to-day management can be easier with the right team. For example, Columbus, Ohio has been a popular spot lately because you can still find single-family homes or small duplexes in the $120K–180K range that hit the 1% rule and cash flow from day one, and the macroeconomics are solid with population growth, job growth, and big companies like Intel, Amazon, Google, and Honda investing here. Some investors are also bundling a few units together to reduce the number of individual property headaches while increasing overall cash flow and appreciation potential. Happy to connect and answer any questions you have!
Jimmy Lieu, Red 1 Realty4.9121 Reviews - Real Estate Consultant · Danville, VA · Member since 2023 · 11 posts · 2 votes10mo
Quote from @Nick Morrison:
After buying my fourth investment property this year and dealing with tons of headaches over the last few years I'm starting to rethink buying single family investment properties next year. Wondering if anyone else is feeling the same and what their game plan for 2026 is.
Anyone else making a shift in 2026?What were the headaches and hurdles you have been experiencing with your investment journey?
- 10moShiloh LundahlPro MemberRental Property Investor · Gilbert, AZ · Member since 2016 · 3k+ posts · 4k+ votes
Hey@Nick Morrison the buy and hold model is a good start to get into real estate but I think the real money is in specializing. It doesn't matter which area of real estate. But if you want to make a lot of money then I would encourage you to become one of the top 10% producers in that niche. For me, I still do the BRRRR model but then I add lease options to it and I would say I am probably within the top 10 or 20% of investors that do lease options. So just pick something and go all in on it until you get to that level.
- 10moArman AhmedPro MemberReal Estate Agent · Columbus Cleveland Dayton, OH · Member since 2024 · 2k+ posts · 963 votes
A lot of investors I talk to are thinking the same way. Rising costs and management headaches are pushing people toward Midwest markets where entry prices are lower, cash flow is stronger, and BRRRRs still make sense without forcing thin deals. Many are shifting to small multifamily or cleaner B/C areas so the numbers work even with conservative assumptions. The strategy seems to be fewer but better deals that actually perform, instead of chasing volume.
- Real Estate Agent · Chicago, IL · Member since 2017 · 2k+ posts · 2k+ votes10mo
BRRR in 2026 is almost entirely an equity play as the cashflow just is not there, without the cashflow the properties tend to not be as enjoyable to manage. Maybe leave some equity in after the rehab, thats what most of my clients doing now and can get you nice numbers plus a huge bonus getting to cash out refi sometime in the future hopefully with lower rates.
- Lender · Marlboro, NJ · Member since 2025 · 243 posts · 150 votes9mo
I think a lot of people are hitting this wall, especially after scaling single-family quickly. In my experience, the issue usually isn’t SFHs themselves, it’s that the strategy stops being repeatable once execution risk stacks up.
By the time you're on your 3rd or 4th BRRRR, timing mismatches, refi delays, and contractor variability start compounding. That's when investors either slow way down or start forcing deals.
For 2026, I’m seeing more people shift focus from “more properties” to fewer, cleaner executions, whether that’s small multifamily, tighter refi planning, or prioritizing certainty over max leverage.
The biggest change isn’t asset class, it’s designing the strategy so one deal doesn’t jeopardize the next.
- Investor · Indianapolis · Member since 2025 · 5 posts · 8 votes7mo
Quote from @Pierre Guirguis:
I think a lot of people are hitting this wall, especially after scaling single-family quickly. In my experience, the issue usually isn’t SFHs themselves, it’s that the strategy stops being repeatable once execution risk stacks up.
By the time you're on your 3rd or 4th BRRRR, timing mismatches, refi delays, and contractor variability start compounding. That's when investors either slow way down or start forcing deals.
For 2026, I’m seeing more people shift focus from “more properties” to fewer, cleaner executions, whether that’s small multifamily, tighter refi planning, or prioritizing certainty over max leverage.
The biggest change isn’t asset class, it’s designing the strategy so one deal doesn’t jeopardize the next.
Pierre,
I think you hit it on the nose here. Once you hit 3 or 4 it starts to get very complicated. What new strategies are you deploying this year?
- Investor · Member since 2026 · 21 posts · 29 votes9mo
@Nick Morrison
For 2026, I'm either building a hands-off system for my current homes or shifting capital to commercial assets for better scalability. A cost segregation study on your portfolio and it helps capital needed to fund that transition. - Member since 2026 · 35 posts · 3 votes6mo
Nick, I hear you on the SFR headaches. After a certain number of doors, the "simple" BRRRR model on singles can start to feel like you're just stacking more moving parts instead of building something scalable.
A lot of investors I work with are shifting their 2026 plan toward small multifamily and select growth markets where the numbers and operations pencil more cleanly. Our weekly market update has been consistently showing stronger investor activity and yield potential in places like Houston, Tulsa, and parts of the Carolinas compared with many Midwest metros, especially for entry-level multifamily and BRRRR-type plays.
On that note, I’d be cautious about Cleveland if you’re not local. The combination of stricter housing codes, heavier enforcement, and the need for a truly dialed-in local team has made it a tough environment for out‑of‑state owners; you see a lot more stories now about remote landlords getting squeezed on compliance, turnover, and collections there. If you don’t already have boots on the ground, there are simply easier places to execute the same strategy.
For my own 2026 game plan (and what I'm recommending to a lot of investors), the focus is: fewer projects, better markets, and more repeatable product—think small multifamily/newer construction in landlord‑ and lender‑friendly metros where you can rinse and repeat without reinventing the wheel each time. Curious how others here are retooling their BRRRR strategy for next year.
- 6moCameron TopePro MemberProperty Manager · Katy, TX · Member since 2015 · 1k+ posts · 1k+ votes
Nick,
What headaches are you experiencing?
Management? Returns? Expenses?
- Realtor · Memphis · Member since 2021 · 48 posts · 26 votes6mo
If I find a right deal, all the hard work turns into something. The idea for me is to be very strict with my purchase criteria because with every deal, I am not only committing money but also time.
- Investor · Oakland, CA · Member since 2017 · 35 posts · 12 votes4mo
The headaches you're describing are real, but I'd separate the operational problem (managing SFHs is harder than the spreadsheet suggests) from the deal-selection problem.
Most of the frustration I see with BRRRR in 2026 comes from deals that looked fine on paper but were underwritten in the wrong order...cash flow first, ARV check last. When the ARV doesn't support the refi, you're stuck holding a property at high leverage with thin margins, which is exactly when every operational problem hurts more.
The screen I run now: ARV comp check before anything else. If the all-in basis is above 90% of ARV, the deal doesn't make it to the pro forma. It's cut out the majority of MLS deals I've looked at, but the ones that survive it are actually worth owning.
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