Let’s talk about my “Hell House.”
I bought it for an incredibly cheap price of just $40,000. What a steal, right? Then I put about $40,000 worth of work into fixing it up and refinanced it, a strategy I call “BRRRR” (buy-rehab-rent-refinance-repeat).
And then it was all downhill from there.
You see, although I thought I was going to make a decent monthly profit on the property, the truth is: I don’t.
I lose money every single year.
Every. Single. Year.
The purpose of this post is to teach you what CapEx is and what you can do about it to avoid your own Hell House.
What is CapEx? (Capital Expenditures)
Everyone knows analyzing properties is important. After all, if you don’t have the right math going into an investment, you’ll never get the right profit coming out of it.
And most of us can estimate expenses like repairs, vacancy, and property management fairly easily. But the one area nearly every new investor struggles with is CapEx.
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