Is the BRRRR Strategy Successful When Rehab is Contracted Out?

Question

My husband and I are looking for our first investment property in the Northern Kentucky/Cincinnati area. We both work full time and have 2 small kids. I was looking for feedback in using the BRRRR strategy, successfully, when contracting out the Rehab piece. Is it possible to have positive cash flow and appreciate decently by doing this? I know a lot of money is saved by doing the rehab yourself, but it’s just not something we are able to do at this time.

Whitney Hutten · Answer

@Natalie Sologic Yes!  But you have to bake it all into the numbers.  I've swung the hammer only on 1 of my BRRRR properties... all of the others, I hired it out. The contractor can do it quicker, better, and most likely less expensive than I can (my drywalls suck!). I encourage you to think of your rentals as a business owner and treat them as such.

Whitney Hutten · Answer

@Natalie Sologic Initially, I did the estimating my self (and it wasn't that great... it takes practices).  Then I started investing out of state and was forced to find great people to help me (realtors who have flipped, property managers who do construction, inspectors who also contract).  On your next property you look at, bring someone who can help you estimate things... and practice.  You could even find a contractor and pay them $100 or so and have them walk it with you.  Yes, it costs, but think of it as you paying for the education (and maybe getting a great contractor to boot!).

Natalie Sologic · Answer

@Whitney

Thank you for the encouragement! I think my struggle is how to bake that into all of my numbers when trying to determine if something is a good deal. Did you have a contractor bid jobs prior to purchasing a property or just made estimates using your own research? I know it gets easier as you get more experience, but this initial jump is hard!