Christian OsgoodCEO, Multifamily Strategy · CEO at Multifamily Strategy

Why The BRRRR Model Isn’t The Best Strategy

25 Jan 2023 · 0 min

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0:14

Two investors debate the BRRRR real estate model. Speaker B warns it's vulnerable to contractor costs, interest rates, and tenant payments. Speaker A argues buy-and-hold with fixed-rate financing builds steadier cash flow and keeps you from losing the property.

If you're buying real estate, use a model that works through every cycle. If you're dependent on contractor prices, interest rates, people paying rent, which you have to on a BRRRR deal, it's probably not the right model.
Yeah, buy and hold, fixed rate for cash flow. If you buy for cash flow, you're going to be fine. Buy so you can hold it. If you buy it so you never have to lose it without changing your financing, you're good to go. You don't have to BRRRR every property. You can scale faster if it's just a tool in your tool belt. Still a great strategy. Doesn't work for everything.
Make sure to choose a winning strategy. Seller financing is one way to do it, but just solve for how do you buy it? How do you never lose it?