Completing a BRRRR in C or D neighborhoods

[Salvatore Amato]

I'm searching for my first deal and I want to do a BRRRR, but with the funds available the only homes I can buy with cash and rehab are in C or D neighborhoods. Since the neighborhood isn't the best, I'm concerned the value of the home won't go up over the years as it would in a better neighborhood.

Does anyone have experience doing BRRRR's in C or D neighborhoods that can give some advice? Thanks!

[Nadeem Alamgir]

Hey Salvatore, I work with A LOT of BRRRR buyers in the C and D neighborhoods. The strategy works as long as your all in (purchase + rehab) stays under about 75–80% of ARV or leaving some in. If you go this route, make sure the numbers are conservative and that you have strong property management lined up. The tradeoff is tenant turnover, management headaches, and slower long term appreciation compared to A/B neighborhoods.