CalculateRealEstateROI

BRRRR

What's the most common BRRRR failure?

Appraisal coming in below pro forma, leaving capital trapped in the deal.

Reviewed by Keiron Brown, Founder & Editor, CalculateRealEstateROI · Educational estimates only — not investment, financial, tax, or legal advice

Direct answer

Appraisal coming in below pro forma, leaving capital trapped in the deal.

Expanded explanation

Mitigate: get pre-rehab appraisal estimate, over-comp rather than under, communicate scope to appraiser, build deal to 75% (not 70%) of ARV for cushion.

Examples

  • Pro forma $200k ARV → appraises $175k → $15k stuck.

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