What funding method besides traditional mortgage makes since when buying a rental that needs improvement but there are no comps and the values haven’t been increasing much.
Can you be a little more specific like give us the numbers on the deal you are referring to. I feel like values everywhere have been going up. What price range are you looking at? You might not be getting the home at a low enough price.
@Walter McCloud Whenever we purchase a property, increasing the value through appreciation is not taken into consideration. We are improving the property which FORCES the appreciation....but the 4%-10%....or in your case 0% appreciation isn't included in the math. That's just a bonus.
So if I can try to anticipate what you are thinking - "Then how do I buy a property at market value and make it worth more?"....and the answer is that you don't. We never ever buy at market value. We always buy UNDER market value. Well, I'm sure there's always an exception to the rule....but to make the BRRRR method work, you must buy significantly under value. That way you have enough room to wrap in your renovation AND leave equity in the property. You've got to do both. And that's why we can't buy properties at fair market value. It just won't fit.
I hope all of this makes sense but feel free to ask anything else additional that you may need. Thanks!
@Andrew Postell this was great Thank you so much. I’ll keep looking for the right property.
@Curt Davis Well Curt I was looking at a property for 360K. The answers below gave me the insight I needed for now.