How to execute BRRRR remotely? Looking for help getting started.

26 Replies

@Lucas Mills , I agree with your assessment that "a house for 7k (that needed about 30k-40k of work) still wasn't all that great when analyzed (would only rent for about $500-$550)". I read in another thread where a similar purchase and rehab price point was being discussed, resulting in its ARV of $80-100k. There, I reminded the OP of the poster who mentioned that in that area, HE could be all-in for $20k to achieve $600/m rent (but perhaps not as high ARV)!

I reckon you WILL find it hard to find value-for-money REMOTE Contractor/s, who'll do say $35k of value-added work for just $15k. If you can't find a way to value-add for a LOT less than what the subsequently increased value would become, and/or get sufficient enough discounts from MOTIVATED Sellers in the first place, how will your BRRRR plan be possible? (Hint: I said "hard", not "impossible").

Because cap ex doesn't rise or fall based on gross rent, I agree that the lower the rent, the more difficult it is to make a conservative analysis work in your favor. Perhaps a minimum rent figure IS needed for your analysis, and perhaps those areas that rent for $550 just won't cut it for your goal. [Possible exception: MFRs = $550 x 2,3,4]. So, how about: find out where (say) $800/m IS the going rate in Springfield, and look for the worst houses in the best streets - in those areas? ie. That's what Flippers do. The only difference is, you might not be flipping them after all. Cheers...

Originally posted by @Brent Coombs :

@Lucas Mills, I agree with your assessment that "a house for 7k (that needed about 30k-40k of work) still wasn't all that great when analyzed (would only rent for about $500-$550)". I read in another thread where a similar purchase and rehab price point was being discussed, resulting in its ARV of $80-100k. There, I agreed with the poster who told us that in that area, HE could be all-in for $20k to achieve $600/m rent (but perhaps not as high ARV)!

I reckon you WILL find it hard to find value-for-money REMOTE Contractor/s, who'll do say $35k of value-added work for just $15k. If you can't find a way to value-add for a LOT less than what the subsequently increased value would become, and/or get sufficient enough discounts from MOTIVATED Sellers in the first place, how will your BRRRR plan be possible? (Hint: I said "hard", not "impossible").

Because cap ex doesn't rise or fall based on gross rent, I agree that the lower the rent, the more difficult it is to make a conservative analysis work in your favor. Perhaps a minimum rent figure IS needed for your analysis, and perhaps those areas that rent for $550 just won't cut it for your goal. So, how about: find out where (say) $800/m IS the going rate in Springfield, and look for the worst houses in the best streets - in those areas? ie. That's what Flippers do. The only difference is, you might not be flipping them after all. Cheers...

This is good advice, and actually I had not considered looking at the situation in this way. You are right - properties that rent for less than 600 or so simply will not cash flow to the degree that I'm looking for; at least, if we're talking about single-family homes. I've seen some duplexes for ~70k wherein each unit rents for ~550, so we're getting much closer here. The problem is that while these units may need 10k worth of work or so, the price is already close to ARV so there isn't room to refi and get my original investment back out. That said, it sounds like I need to be targeting multifamily properties that need work, enough such that it supports the execution of the BRRRR strategy, and, ultimately, the ability to cash out at the refi in order to quickly continue property acquisition.

Generally speaking, does this sound correct, given my goals, location, and market?