All Forum Posts by: Jim Gurtner

@Whitney Hutten Thank you Whitney! I had not thought about pulling out so much cash that the property would not cash flow when renting! I can see how that could happen if there was too much equity in a high-value property. Thanks again for your response - it was very helpful!

On page 82 of the BRRRR book it says if a property cash flows $300/month, but has $60k in equity, flipping should be considered due to low ROI.

I have a property that will have $80k into it, including rehab. It will appraise for $185-220k, with resulting equity of $105-140k. So according to the BRRRR book I should flip, right?

If I only find deals like this, I should always flip and never BRRRR, right?

Here is the exact quote from the BRRRR book:

" How can you know if you should refinance or sell? I advise investors to analyze whether the ROI you will get on a particular deal is as good as the ROI you can expect on your current deal. For instance, if you run the numbers and see you can BRRRR and achieve a 10 percent ROI, but you know you are averaging a 30 percent ROI on most other deals, you may want to sell that property and recover your money to put somewhere else that will give you a better return.

This becomes especially important when you are likely to add more equity to the property than you originally anticipated. If you thought you might make $30,000 on a flip when you first analyzed it, but end up looking at a possible $60,000 profit, that would cause me to look closer at the ROI on my cash flow. If I find that I'm going to cash-flow $300 a month, I can quickly see that $300 a month is a 12 percent return on the $30,000 I would have made, but only a 6 percent return if I'm going to have $60,000 in equity.

This would cause me to consider flipping instead. If done well, I would end up with more capital to put into future properties.”

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $10,090

5 acres with two houses. In the middle of rehabbing both. Target completion date and sale May 2021.

What made you interested in investing in this type of deal?

Abandoned country property with lots of potential. Beautiful high, clear, and mostly level 5-acre lot.