Two prominent Louisville real estate investors are pivoting away from the popular house-flipping model, citing significant shifts in the local housing market. Mike Gorius and Kevin Hart, who completed 54 deals in 2025 for over $1 million in gross revenue, are now focusing on a long-term rental strategy to navigate increased market uncertainty.
The move reflects a broader trend where investors are seeking more stable, predictable returns as properties take longer to sell and inventory levels rise. Their new approach prioritizes building a portfolio of cash-flowing assets over the quick profits associated with flipping homes.
Key Takeaways
- Louisville investors Mike Gorius and Kevin Hart are moving from house flipping to the BRRRR rental strategy.
- The shift is a direct response to a cooling market, where homes are taking three times longer to sell.
- Housing inventory in the area has increased by over 50%, from 2,500 to nearly 3,900 homes.
- The BRRRR method (Buy, Rehab, Rent, Refinance, Repeat) is seen as a lower-risk alternative that builds long-term wealth.
Market Conditions Force a Strategic Pivot
After a successful year that saw them nearly double their revenue by focusing on larger projects, Gorius and Hart are adjusting their business model for 2026. The primary driver is a noticeable slowdown in the Louisville real estate market that began in late 2025.
"Since around September, the market has dropped pretty significantly," said Kevin Hart. He pointed to clear indicators of this cooling trend.
According to Hart, the number of homes on the market has surged from approximately 2,500 to nearly 3,900. Simultaneously, the average time a property stays on the market has tripled, now extending beyond a month and sometimes reaching two months.
This extended selling period introduces significant risk for house flippers, who rely on quick turnarounds to maximize profit and minimize holding costs like loan interest and property taxes. "Unless it's an absolute home run, it just doesn't make as much sense in this market," Gorius explained about their decision to reduce the number of flips.
The Growing Risks of House Flipping
In a fast-moving market, sellers often receive multiple offers within days, providing a safety net for investors. However, in the current climate, that margin for error has vanished.
"If you overpay for a property, you're not getting like 10 offers in the first 24 hours," Hart noted. "It may sit on market for a month because you overpriced it, and then the price just continues to drop. So you really have to make sure you're buying at the right price."
What is House Flipping?
House flipping is a real estate investment strategy where an investor purchases a property with the intention of selling it for a profit. Profit is typically generated by buying undervalued properties, making repairs or renovations, and then selling quickly in a rising or stable market. The strategy's success is highly dependent on market speed and accurate cost estimation.
The duo's past success came from scaling up their operations. In 2024, they completed 52 deals and grossed around $500,000. In 2025, with just two more deals, they grossed over $1 million. "Our deal size almost doubled," Gorius said. Now, that focus is shifting from deal size to deal strategy.
Embracing the BRRRR Method for Stability
In place of flipping, Gorius and Hart are leaning heavily into the BRRRR method. This acronym stands for Buy, Rehab, Rent, Refinance, Repeat. It is a long-term strategy designed to build a portfolio of rental properties.
The process involves:
- Buy: Purchase a distressed or undervalued property.
- Rehab: Renovate the property to increase its value and make it rentable.
- Rent: Place tenants in the property to generate cash flow.
- Refinance: Obtain a new loan on the property based on its new, higher appraised value. This often allows the investor to pull out their initial investment capital.
- Repeat: Use the recovered capital to purchase the next property.
This approach offers a more predictable outcome compared to the volatility of the retail sales market.
"You're taking out the risk of the market," Hart explained. "You know that at the end of the rehab you can get a tenant in there and you can immediately refinance with the bank."
A Long-Term Vision for Building Wealth
While the BRRRR method may not offer the immediate lump-sum payout of a successful flip, it aligns with a strategy focused on sustainable, long-term wealth creation. By retaining ownership of the asset, investors benefit from property appreciation, mortgage paydown by tenants, and consistent rental income.
Gorius emphasized the forgiving nature of holding real estate over time, even if a project doesn't go perfectly to plan.
"The truth is, in real estate, time does heal all," he said. He explained that even if an investor has to leave some money in a deal after refinancing, owning the asset is what matters. Rental income can cover expenses, and over the years, rising rents and property values will eventually cover the initial shortfall and generate positive returns.
This strategic shift by two successful investors highlights a growing caution in the real estate market and a renewed appreciation for the foundational principles of buy-and-hold investing.
