BRRRR and Overleveraged
HI all,
I'm new to the BRRRR method.
I own two properties in CA, and want to expand. I'm Currently reading the BRRRR book from bigger pockets. How does one amass a large portfolio while hedging against being over leveraged. Obviously you need to buy good deals to make it work, but I'm used to California where property values only go up.
I understand the term "over leveraged" to refer to situations where an investor has borrowed more money than the value of the properties. It seems one downturn in a market could instantly put an investor upside down. I'm assuming as long as rents are covered you just ride it out and diversify with a few properties per market?
Cash flow is king in the BRRRR world. if they dont cash flow its going to be difficult to refinance and do it again. California is going to be exceedingly difficult to do it. I'm doing this in the Midwest where the prices are low enough to fund the deal without the bank to start out with. The cashflows is also really solid and gives you a margin of safety in case there are any repair issues in the future. Happy to connect and share my success (and failures) /
Do you have a particular calculator you use for deal analysis?
