How do you decide which strategy makes the most for a deal?

[Saar Dau]

I've been thinking about how different investors underwrite the same property, and I'm curious how others approach this.

Let's say you find a property that looks interesting at first glance.

Depending on the numbers, it could potentially work as:

Flip

BRRRR

Long-term rental

Do you usually underwrite all three before deciding which strategy makes the most sense, or do you already have a preferred strategy and only analyze the deal through that lens?

I'm particularly interested in how people compare the risk-adjusted return, rather than just looking at the highest projected ROI.

For example, a flip might show a higher absolute profit, while a BRRRR could leave you with significantly less capital tied up and a rental could provide a different risk/return profile.

How do you guys actually make that decision today?

Excel? BiggerPockets calculators? Or do you just know pretty quickly from experience?

I'm asking because I'm using a tool that I specifically designed around comparing multiple strategies on the same deal, and I'm trying to make sure the workflow actually matches how active investors think about deals and how the deal works for you for the best.

[Matthew Irish-Jones]

Quote from @Saar Dau:

I've been thinking about how different investors underwrite the same property, and I'm curious how others approach this.

Let's say you find a property that looks interesting at first glance.

Depending on the numbers, it could potentially work as:

Flip

BRRRR

Long-term rental

Do you usually underwrite all three before deciding which strategy makes the most sense, or do you already have a preferred strategy and only analyze the deal through that lens?

I'm particularly interested in how people compare the risk-adjusted return, rather than just looking at the highest projected ROI.

For example, a flip might show a higher absolute profit, while a BRRRR could leave you with significantly less capital tied up and a rental could provide a different risk/return profile.

How do you guys actually make that decision today?

Excel? BiggerPockets calculators? Or do you just know pretty quickly from experience?

I'm asking because I'm using a tool that I specifically designed around comparing multiple strategies on the same deal, and I'm trying to make sure the workflow actually matches how active investors think about deals and how the deal works for you for the best.

 Strategy is normally based on current available Capital and execution potential.  If you have little Capital and don't own infrastructure, taking small quick wins to build Capital is best. 

If you have lots of Capital and infrastructure, you can't screw around taking small wins.  You need to stay focused on feeding the machine and long term equity.