BRRRR or house hacking?

Question

If you had to choose between house hacking and the BRRRR method, which would you go with and why?

I can see the benefits of both, whether it’s saving money by living in one unit and renting out the others, or using the BRRRR method to keep growing your portfolio.

For those who have done either one, what’s been your experience? And for someone just getting started, which route would you recommend?

Would love to hear some real opinions!

Aaron Zimmerman · Answer

For someone just getting started, house hacking is the way to go. You’re ideally saving $$ on total housing cost and it’s very hard to execute a successful BRRRR on your first try. You generally also need a lower down payment on average for house hacking as opposed to BRRRR.

Ametria Chaney · Answer

Brook, these aren't really competitors — they answer different questions. House hacking is the best first move when you're short on capital: you get into a property with a low down payment, live in one unit or bedroom, and let the other space offset your housing cost. BRRRR is a scale play — it requires buying at a real discount, funding the rehab, and having the reserves to carry the refi timeline. For most beginners, the sequence is house hack first, learn landlording on your own home, then BRRRR the equity into the next one. Either way, underwrite the deal as a rental on day one — if it doesn't cash flow as a straight rental, neither strategy saves it. What's your capital and timeline looking like right now?

James Jones · Answer

Brook, BRRRR, and it is not close for one reason: the refinance hands your capital back. My whole portfolio — 236 properties in Memphis — runs on that loop. Buy single-family under $100K, put in a standard $40K rehab, and the house has to appraise at $180K to $265K on sold comps. Refinance on a DSCR loan at 70 to 80 percent LTV, rent it at the 1 percent rule — Section 8 pays $1,395 to $1,950 for 3BR and up — and the same dollars go buy the next one. House hacking is a fine first step, but you can only live in one property at a time. With BRRRR the bottleneck becomes deal flow, not savings, and that is a better problem to have.

Caleb Brown · Answer

House hacking. BRRR is great but more moving parts. House hacking is more of a straight forward path and less needed to start.

Matthew Morrow · Answer

@Brook Janis for someone just starting, I'd lean house hack. You learn the landlord side while living there, and the financing is easier. BRRRR is how I built most of my portfolio, but it asks a lot: finding the deal, running the rehab, and counting on the appraisal at the end. With appraisals landing light right now, you have to buy right enough to absorb that. My own start was kind of a mix of both. I lived in my first flip, then used the equity for my first rental. Curious what others would recommend.

Sam McCormack · Answer

On paper? BRRRR. In real life? Househack. It's not even close

Never have I once seen a BRRRR or flip go according to plan, especially for an out of state investor

If you have 20 BRRRR's, then sure a BRRRR is better. But if you are starting out, or even only have a few properties, househack all the way

Wale Lawal · Answer

@Brook Janis

As a newcomer, I will choose the approach of house hacking since it gives you an opportunity to save money spent on housing through acquiring experience in renting business. The BRRRR model is much more beneficial in terms of scalability, but at the same time the whole process of reconditioning and refinancing appraisal can be quite complicated sometimes. For this reason, I will first start with house hacking and then proceed to BRRRR.

Good luck!

Divin Kanyama · Answer

@Brook Janis For most beginners, I’d lean toward house hacking. It can reduce personal housing costs, often offers more accessible owner-occupied financing, and lets you learn tenant screening, maintenance, and property management while living close to the asset.

BRRRR can scale faster, but it depends heavily on buying well, controlling renovation costs, achieving the projected value, and qualifying for the refinance. A low appraisal or budget overrun can leave more cash trapped in the deal than expected.

The better choice depends on lifestyle, available capital, renovation experience, and risk tolerance. A strong path could be to house hack first, build reserves and operating experience, then pursue BRRRR deals once you have a reliable team and proven underwriting process.

Hossein Sharifi · Answer

@Brook Janis For most people starting out I'd house hack first, mostly because of the down payment. On a $400K duplex, 5% down owner-occupied is $20K. The same property on an investment loan at 20-25% down is $80K-100K. That gap usually decides it.

BRRRR works when the appraisal cooperates, and that's the part you don't control. On my own Cincinnati BRRRR, one lender appraised it at $325K and the next came in at $253K. A swing like that changes your cash-out by tens of thousands.

The best beginner version is the mix Matthew described: buy a small multi that needs work, live in it while you fix it, then refinance or move out and keep it. You get the low down payment and the forced equity.

Jarret Jarvis · Answer

If you’re just getting started, I’d go with house hacking. Here’s why.

The barrier to entry is so much lower. Owner-occupant financing lets you buy a 2–4 unit with a much smaller down payment than an investment loan, so you’re not draining your savings on your first deal.

You learn landlording with training wheels. When your tenant lives on the other side of the wall, you learn fast: screening, maintenance, leases, setting expectations. Those lessons are a lot cheaper to learn on your own property than on a portfolio.

Your biggest expense goes down immediately. Cutting or eliminating your housing payment frees up cash every month, and that becomes the capital for your next deal.

BRRRR is a great strategy, but it rewards experience. You need cash or private money for the purchase and rehab, a contractor you trust, a solid read on after-repair value, and a refi that actually comes in where you need it. With today’s rates and conservative appraisals, a miss on any of those can leave your money stuck in a deal much longer than planned. It works best once you’ve got a few reps, relationships, and reserves.

The sweet spot is combining them. Buy a 2-flat or 3-flat that needs some work, live in one unit, improve it over time, then refinance or move out and keep it as a rental. You get the low entry point of a house hack with the forced appreciation of BRRRR. Here in Chicago, our 2-flat and 3-flat inventory makes that play especially accessible.

Whichever route you pick, run conservative numbers, keep healthy reserves, and build your team before you need them. The first deal is the hardest. After that, it gets a lot more fun.

BRRRR or house hacking?

BRRRR or house hacking?

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