I'm trying to figure out what is the best way to find a BRRRR property as an investment. I realize that there is the marketplace on here but unfortunately by the time I find a BRRRR listing, it has already been sold. I also know that there are other investors that are able to find properties without using the marketplace on here. I'm guessing spending hours on Zillow looking for the right one or having the right connections? My markets that I am looking for are in Phoenix and the Inland Empire in southern California.
Rental Property Investor · Concord, NC · Member since 2016 · 1k+ posts · 3k+ votes
8y
Generally, in a seller's market an investor cannot compete with owner occupants on MLS properties. You will need to take additional risk and buy from places like auctions, HUD, Homepath, wholesalers, FSBO, drive-bys, Craigslist, etc. A young investor should be very cautious in the current market.
Rental Property Investor · Concord, NC · Member since 2016 · 1k+ posts · 3k+ votes
8y
Generally, in a seller's market an investor cannot compete with owner occupants on MLS properties. You will need to take additional risk and buy from places like auctions, HUD, Homepath, wholesalers, FSBO, drive-bys, Craigslist, etc. A young investor should be very cautious in the current market.
Terrell nailed it on the head. California and Phoenix are super hot seller's markets right now... there's simply too much competition from other buyers looking to live in the home and willing to pay market price. If you're anywhere near the median home price there will be multiple offers and you're going to have to compete to win. That's just the way it is.
Now... that's not all a bad thing, because that same action is what's going to drive your property up in value over the next few years. You can't really have the best of both worlds (Have a buyer's market where you can steal a property off the MLS for next to nothing, and then expect it to greatly appreciate in value).
You can win with either strategy (Buy near market and let it appreciate while the tenant pays down the principal and you get the tax advantages, or BRRRR somewhere with easier inventory selection), but in a seller's market to get a property and the discount you want it for you're basically going to have to steal it from somebody.
In that case, you're going to need a motivated seller. Someone who's willing to sell at a discount just to get the property gone. That will be notice of defaults and trustee sales (preforeclosures), ugly houses, out of state owners who don't care anymore, etc. Try using those methods to generate some leads, and then do your market research before you buy so you know you're getting the property at a price where the deal makes sense for your BRRRR strategy. Best of luck!
Residential Real Estate Investor · Kansas City, MO · Member since 2014 · 10k+ posts · 5k+ votes
8y
Back in the day, we could just find them by looking at REO's listed on the MLS. But today, there is much less inventory and it's much more of a seller's market. So right now, I think you need to use direct-to-seller marketing to find good BRRRR properties, at least for the most part.