BRRRR METHODS VS FLIPPING HOUSES

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FOR STARTING OUT

Between the BRRRR method and house flipping, which is better to start in? Both methods involve buying distressed properties and fixing them up. They differ after that point.

BRRRR Method One aspect of the BRRRR method that is nice is that you do not have to add quite as much equity as if you were going to flip it since you are not selling it.

BRRRR Method Pros

There are many renovations for a rental that do not take a lot of money, such as adding a coat of paint.

BRRRR Method Cons

Renting the house out is a long-term commitment. Even with professional property management, this method requires an ongoing commitment to making it work.

The Fix and Flip Method

The fix and flip method’s idea is to make money by buying a distressed house, renovating it, and selling it for more money than you have invested in it.

Fix and Flip Method Pros

The big one for me is the ability to scale faster than BRRRR. With BRRRR, the goal is to have a 1:1 ratio with refinancing and repeating.

Fix and Flip Method Cons

The big disadvantage with flipping usually comes down to what types of properties would actually fit the model. Finding contractors is a challenge too.

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