751: Why the BRRRR Method WON'T Be the Same in 2023

BiggerPockets Real Estate Podcast

BiggerPockets

Education, Business, Investing

4.8 • 16.5K Ratings

🗓️ 11 April 2023

⏱️ 56 minutes

🔗️ Recording | iTunes | RSS

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Summary

The BRRRR method just got served a devastating blow. With new financing rules and regulations, the “Buy, Rehab, Rent, Refinance, Repeat” strategy could be coming to a close for rookie real estate investors. This is a sensitive subject for most investing experts, as the BRRRR method was almost foolproof from 2010 to 2020. ANYBODY could find a house needing renovations, make some needed repairs, and turn it into a cash cow by refinancing out of their original loan. But now, the tide has started to turn, cash flow has been erased thanks to high mortgage rates, and finding a home for sale isn’t as easy as it always was. For investors who relied on the BRRRR method, this could be seen as the end of a wildly profitable era. But for expert investors like David Greene, Henry Washington, and Rob Abasolo this is just the beginning of a new type of BRRRR that could pay off handsomely but has much more lethal side effects. In this episode, we’ll get into exactly what the BRRRR strategy is, how investors use it to recycle their down payments, and what changes have caused it to go out of style. Our expert hosts will also describe what you MUST do to make your BRRRR investment work in 2023 and why simply buying a fixer-upper is NOT a worthwhile strategy. So stick around if you don’t want to get burnt on your next BRRRR! In This Episode We Cover: The BRRRR method explained and why it’s such a profitable rental property strategy What changed in the BRRRR method and why 2023 will be MUCH more challenging Seasoning period requirements and how long you’ll have to wait before refinancing BRRRR red flags and what to do to protect yourself from buying a bad deal The 1% rule and whether or not it’s still worth chasing in 2023 Expert ways to get around BRRRR waiting periods and high-interest rates And So Much More! Links from the Show Find an Investor-Friendly Real Estate Agent BiggerPockets Youtube Channel BiggerPockets Forums BiggerPockets Pro Membership BiggerPockets Bookstore BiggerPockets Bootcamps BiggerPockets Podcast BiggerPockets Merch BPCON2023 Listen to All Your Favorite BiggerPockets Podcasts in One Place Learn About Real Estate, The Housing Market, and Money Management with The BiggerPockets Podcasts Get More Deals Done with The BiggerPockets Investing Tools Find a BiggerPockets Real Estate Meetup in Your Area David's BiggerPockets Profile David's Instagram David’s YouTube Channel Work with David Rob's BiggerPockets Profile Rob's YouTube Rob's Instagram Rob's TikTok Rob's Twitter Henry's BiggerPockets Profile Henry's Instagram Try the BRRRR Calculator on Your Next Deal What is the BRRRR Method & How to Use it to Invest in Real Estate How to Properly Analyze a BRRRR Property Books Mentioned in the Show: Buy, Rehab, Rent, Refinance, Repeat by David Greene Click here to listen to the full episode: https://www.biggerpockets.com/blog/real-estate-751 Interested in learning more about today’s sponsors or becoming a BiggerPockets partner yourself? Email [email protected]. Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	This is the Big Apocalypse Pod Pass Show!
0:03.1	751!
0:05.6	You can't cut corners when you're gonna burn.
0:07.8	You have to get it at a better price.
0:09.6	You got to negotiate harder.
0:11.2	You have to look for opportunities
0:12.8	that you could add value to a property
0:14.7	buying an 1100 square foot home
0:16.3	and make it at a 1900 square foot home.
0:18.7	You really have to be disciplined
0:20.5	versus when you're just finding a property
0:22.0	that cash flows, you can be lazy.
0:23.4	And then 10 years later,
0:24.5	it really isn't worth a whole lot more
0:25.9	than you paid for it,
0:26.7	and you're frustrated
0:27.6	because a capsule didn't work out like you think.
0:29.5	So, Wapar is harder.
0:31.2	I still feel like it's safer
0:32.6	because it forces you to do real estate the right way.
0:35.8	Welcome everybody to the biggest,
0:38.2	the baddest, the best real estate podcast
	...

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