What Do You Wish You Knew Before Your First Out-of-State BRRRR?

Question

Hi BP community,

I’m new to real estate investing and currently exploring out-of-state opportunities in the $80K–$125K range, with a focus on BRRRR and small multi-family properties.

I’ve been doing my research, but I know there’s only so much I can learn from books and podcasts — the real lessons come from actually doing deals. Before I jump in, I’d love to hear from those of you who’ve already gone through the process:

• What’s the biggest lesson you learned from your first BRRRR out of state?
• Were there any surprises (good or bad) you didn’t see coming?
• If you could go back, what would you do differently before buying your first property?
• Any tips for building a reliable local team before pulling the trigger?

I know mistakes are part of the journey, but I’d like to learn as much as I can from others’ experiences so I can start strong and avoid the common pitfalls.

Thanks in advance for sharing your insight — I really appreciate it!

Christopher

Travis Timmons · Answer

@Chris Forbush that David Greene BRRRR book is probably around 6-7 years old and not relevant for today's market at all. He has even said on his own podcast that BRRRRs are kind of dead in 2025.

The only people that think out of state flips or BRRRRs are a good idea are those with something to sell or those that have never done a major rehab.

Travis Timmons · Answer

I'll throw out one more response and will then go away. The quality of neighborhood, property, and tenant pool that you get on a $80-125k property is really bad - especially if it is multifamily. I don't know what markets you are looking at, but I used to live in St. Louis, so I'll use that as an example. $100k properties in that market are simply in neighborhoods that nobody with options or a credit score above 600 wants to live. Tenants will be rough, if there is vacancy between tenants, there will likely be break ins and theft, and it may be tough to get contractors or property managers to take on the job due to the low rent/management fees and hassle factor (and theft for contractors).

And if you get stuck or run out of cash and need to sell the thing, your only hope is finding an out of state buyer that also does not know the area. We're on the other side of the largest period of real estate appreciation in my lifetime just a few years ago, and if you can still buy a property for sub-$100k, it's because nobody wants it. I assure you that there is no shortage of capital or real estate investors in these Midwest markets. Local investors are not touching them because they know what they are getting into. First time, out of state buyers simply do not.

I'm not saying do not buy out of state. I invest locally and as far as 2000+ miles away. I can do it and self manage because they are in A/B areas with a really good tenant base. If you buy in C-D-F markets in 2025 from out of state as a first time investor, there's probably a 90% probability that you are going to sell for a loss within 2 years as I see it.

Feel free to reach out. I have a background in live-in flips, long term, mid term, and short term rentals. I'd be happy to help if you have not grown weary of my cynicism and negativity on this strategy.

Nicholas L. · Answer

@Christopher Rubio

just like @Travis Timmons, i am going to chime in (since you have a bunch of overlapping threads going) and then i shall also go away.

out of state BRRRR is spectacularly high risk.  if you can fly to your chosen market every week and oversee your project in person in the city where your uncle lives and you went to college, that's one thing.  if you're going to try to Internet it... that's another.

in Pittsburgh, for example, you can buy a $100K property in an OK area.  but, you need to know where to buy, and it's going to need a rehab.  how do i know this?  because i am working on one right now.  i go there every other day to check in on things and keep things moving.

Travis and I are trying to cut through the cheerleading and actually help you.  the market is terrible right now - this cannot be overstated.  there is so much demand that returns have been compressed.  this is the cold truth: unless you have all of the pieces in place to be successful, you're probably better off just putting your money into a savings account.

hope this helps.  good luck.

Jaron Walling · Answer

As local investor that's friends with @Becca F. I will back up her words.

We have a network of contractors and also DIY projects and it's still difficult to BRRRR. It's almost impossible to not leave $$$ in a deal unless you buy way below market value. If you buy near market value it's not even a BRRRR. It's just parking money. That makes it challenging to create the "spread" necessary to cash-flow.  Prices have stalled due to the clown show in the White House, and the seasonality of sales.

Becca F. · Answer

These are great points! Any new investor looking at buy inexpensive properties to BRRRR should read this and I specifically want to emphasize that to California investors.

I have similar experiences, Class A single family home, in Indianapolis suburb with great schools, that I now self manage, great long term tenant who communicates with me, newer home but I did buy it in 2013.

I bought Class C in 2023 sold one of them at a loss, and planning to sell the other by next summer. I'm very lucky to not have any tenant issues but the constant repairs are eaten up what little cash flow I had. I ran out the rental property calculator for 20 years - I literally would get a better return from a high yield savings account.

I had made other offers attempting to BRRRR in Indianapolis - renovation costs would likely run over, inflated ARVs and trying to do this from 2000 miles away...hard pass. I did talk to a few honest Indy people who gave me a reality check. Trying to BRRRR in 2025 is a lot different than in 2012-2021 with cost of materials are higher and higher interest rates on the refinance part of the BRRRR. I've done a local renovation where I was on site multiple times a week and I wouldn't attempt to do a BRRRR with out of state, knowing what I know now

In your other posts you mentioned you're in California. If you're in the Bay Area, feel free to DM me. I may be able to connect you with other investors who may let you walk their renovations.

Christopher Rubio · Answer

@Chris Forbush

Thank you so much for the kind words — that really means a lot. I’ve been learning so much just from asking questions and reading the thoughtful responses this community shares, and I’m glad others are finding value in it too.

I actually have David Greene’s BRRRR book on my list, but your recommendation just moved it to the top — sounds like exactly what I need right now. I really like that approach of interviewing multiple people for each role and starting with a strong property management company that truly understands your investment goals. That relationship seems like the anchor for everything else when investing out of state.

It’s great to hear you’re also looking to invest out of state — sounds like we’re both in the same stage of learning and planning to take action soon. I’ll definitely keep posting updates along the way, and I appreciate your offer to connect and share insights. Let’s keep in touch and learn together.

Christopher

Chris Forbush · Answer

Christopher, your posts are gold! I love the questions you ask because they're really pointed in the right direction and there's a lot to learn from reading the responses you get from experienced investors.

I myself am learning along similar lines and am really interested in investing out of state as soon as I am able to. All I can say is what I've learned from David Greene's BRRRR book. If you haven't yet picked it up, I strongly recommend it. It sounds like it's right up your alley.

He recommends interviewing around five people for various team members you need. I'd personally start with finding a property management company that understands what you're working to accomplish and has a track record of success. You could add value to the relationship with them by referring them to others when timing is right and they could help with recommending other professionals you need on your team in that area, help to find other properties, etc.

I'm looking forward to learning of your successes and lessons learned, Sir. Please keep us posted about where this goes for you and let me know if I can be of assistance in any way.

All the best to you and yours!

Chris Forbush · Answer

@Travis Timmons thank you for informing me of that. This is something I did not know and that is why I love this community so much. I sincerely appreciate your feedback.

Christopher Rubio · Answer

@Nicholas L. love this

I really appreciate you and Travis taking the time to share the honest perspective — that kind of straight talk is exactly what I need as someone new to out-of-state investing. I completely understand what you’re saying about the risks of trying to manage a BRRRR remotely without strong local connections or oversight. That’s actually been one of my biggest concerns, and why I’ve been focusing so much on building a trustworthy team before making any moves.

I hear you on the market being tough right now, too. I’m keeping my expectations realistic and looking at this as a long-term play — even if that means starting smaller or more conservatively with something turnkey or light rehab just to get experience and momentum.

Thanks again for the dose of reality — I’d much rather hear the truth from investors who’ve done it than learn it the hard way.

Ashish Acharya · Answer

@Christopher Rubio

I’ll explain it more from a tax perspective. The main thing is tracking your costs properly. Rehab expenses that add value or extend the life of the property get capitalized and depreciated, while true repairs can be deducted right away. Any carrying costs before the property is rented usually need to be capitalized too. When you refinance, it’s not taxable income, but you’ll want to keep your basis straight for depreciation and when you eventually sell. Clean records from the start will save you a lot of headaches later.

Understand the REPS, STR loophole, and Active participation tax rules so that you can save taxes. This post does not create a CPA-client relationship. The information contained in this post is not to be relied upon. Readers are advised to seek professional advice.

What Do You Wish You Knew Before Your First Out-of-State BRRRR?

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