Real-estate investors seized upon a tried-and-true strategy to fix up homes and make money. Then the market turned.
Home rehabbers are finding that the once-reliable method known as "BRRRR" — short for buy, rehab, rent, refinance, and repeat — has become much riskier
A perfect storm of softening home prices, increasing taxes, higher mortgage rates, and steep building-material costs has made the BRRRR model less attractive to investors.
Not only are homes selling and appraising for less than they were six months ago, which dampens the size of cash-out refinances, but lenders have become more risk-averse.
When the BRRRR numbers don't work, there are a few strategies investors could consider instead.
"What are your exit strategies? Can you hold it? And if you can hold it, are you going to long-term rent it or short-term rent it, or are you going to flip it?"