In BRRRR, should the property be chosen for the rehab discount or for the rent it produces years out

A question worth sitting with in BRRRR is which end of the deal to shop from first. One school of thought says the discount is where the money is made. Buy the roughest house on the block, the one nobody else will touch, because the spread between purchase plus rehab and the eventual appraisal is the entire engine that returns capital. Distressed inventory tends to be the more available end of the market, so that is where the opportunity concentrates. Rent it to whoever qualifies, since the numbers work because the purchase was right. The other school says this is a rental portfolio meant to be held for a long time. The rehab is a one time event, but the tenancy is a fifteen year relationship. That argues for shopping the street, the school zone, the kind of house that attracts a tenant who stays four years, and accepting a thinner discount to get it. A great deal on a house in a location nobody wants to own a decade from now is not actually a great deal. In practice both criteria rarely show up in the same listing, and when they conflict, the discipline that tends to hold up is prioritizing the property that supports the long term hold thesis, then treating a deep discount as a bonus rather than the deciding factor. An operator who buys purely for spread ends up managing a portfolio scattered across submarkets they never intended to be in.