What are the main risks of the BRRRR strategy?
Main risks: (1) Overestimating ARV, meaning if the appraisal comes in low, you can't pull your money out. (2) Rehab cost blowouts that reduce or eliminate the refinance pullout. (3) Vacancy at refinance time, since most lenders want a leased property. (4) Rising interest rates shrinking refinance proceeds and cash flow. (5) Hard money timeline pressure from slow rehabs.