100% Return in BRRRR Isn't always a Good Idea Investing in real estate can be an interesting method to make cash and grow your wealth gradually. One popular method that many individuals use is called the BRRRR strategy. BRRRR means Buy, Rehab, Rent, Refinance, Repeat. This method helps investors buy homes, fix them up, lease them out, and after that re-finance them to get their refund so they can do it all over again. It seems like an excellent plan, right? But here's the important things: some investors make the mistake of trying to get 100% of their cash back each time they re-finance a residential or commercial property. While this concept sounds best, it's not always the very best method to go. In this article, I'm going to discuss why intending for a 100% return isn't practical and how you can be more successful by intending a bit lower. Let's break down what BRRRR implies in easy terms: 1. Buy: First, you purchase a residential or commercial property. It's generally one that needs some work due to the fact that homes that require fixing are often less expensive to purchase. 2. Rehab: Next, you repair up the residential or commercial property. This might indicate anything from painting the walls to replacing the roof. The goal is to make the residential or commercial property look nice so that individuals will wish to reside in it. 3. Rent: After the residential or commercial property is all fixed up, you lease it out to renters. The rent money they pay you every month assists cover your mortgage and other costs. 4. Refinance: Once you have renters in the residential or commercial property, you refinance the loan. This implies you get a new loan based on the residential or commercial property's new, higher value after the rehab. With the cash from the new loan, you can settle the old one and ideally get some extra cash back. 5.