When interest rates are higher, it's tougher to turn a profit. Many swear by this method for financial freedom, but you are basically creating a credit Tsunami that you are trying to outrun. You need to know how to build up equity and get amazing appraisals in order to finance enough to pull cash out as downpayment. It's a delicate game of credit and valuation adn the entire model is built upon property never going down in value. Don't rush into it without a lot of homework!

Yes, I'm familiar with the BRRRR method (Buy, Rehab, Rent, Refinance, Repeat), especially in the context of buying foreclosed properties. The BRRRR strategy can be a highly effective way to build a real estate portfolio, particularly with distressed or foreclosed properties that are often priced below market value.

Pros:

• Lower Purchase Price: Foreclosed properties typically sell for less, which increases your potential for equity after renovations.
• Forced Appreciation: Through rehab, you can significantly increase the property’s value, which can lead to higher appraisals during refinancing.
• Cash Flow: Once rehabbed, the property can generate rental income, covering mortgage payments and potentially providing positive cash flow.
• Portfolio Growth: By refinancing to pull out your invested capital, you can reinvest in additional properties, thus scaling your portfolio faster.

Cons:

• Risk of Unexpected Costs: Foreclosed properties might have hidden damages or legal issues that can lead to unexpected expenses during the rehab phase.
• Market Fluctuations: If the market changes before you refinance, the property’s value might not increase as expected, impacting your ability to pull out enough capital.
• Vacancy Risk: Finding tenants might take time, especially if the property is in a less desirable location, which can affect your cash flow.

Is it a Good Option? It can be, but it requires due diligence. Research the property thoroughly, understand the rehab costs, and consider the local rental market. Also, ensure that your financing options are solid before you proceed. Working with a team experienced in foreclosures and rehabs can make a significant difference in your success.