BRRRR METHOD VS. FLIPPING HOUSES FOR STARTING OUT

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

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

You build wealth slowly in a way that is similar to rolling a snowball down a hill. Each time you do the repeat process, you add more tenants that work to pay your mortgage down and add to your positive cashflow.

BRRRR Method Cons

1. While faster than buy and hold, it is generally slower than flips. 2. You have to deal with ongoing ownership of rental properties.

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. 

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