Comparing a Lump Sum of Cash to Gradual Returns: Exploring Flipping and the BRRRR Method

Everyone has asked themselves this question at some point in their lives: Would having an immediate lump sum of cash today be better than having steady but lower streams of income over time?

Investors have long struggled to grasp this concept, as evidenced in the BiggerPockets forums. Every day, investors post, asking themselves whether cashing out is best or if playing long game is wiser.

There is no one-size-fits-all answer here; I admit I may be slightly partial based on years of conversations with chronic flippers who harbor regret over not keeping more projects.

BRRRR and Flipping
BRRRR and flips are complementary aspects of real estate investing, each serving different markets and properties differently. One key difference between BRRRRs and flips lies in spending more on higher-end finishes with flips versus BRRRRs.

Either way, you are creating equity in your property by taking steps to address deferred maintenance and upgrades, with the hope that eventually they may bring profit. If you plan to flip in a B neighborhood and invest in stone counters and tile accent walls for bathrooms; otherwise renting the same property for 10 years might render those upgrades unnecessary – they could always be added back later when selling!

Yes, a properly executed BRRRR may provide a steady source of funds over time, while flipping is one-and-done. But at their cores both strategies provide quick cash and leverage opportunities – you are forcing equity while hoping for profit margins to expand as soon as possible.