I am looking to BRRRR my first real estate property and was trying to figure out the right markets to look into. I was thinking either around Lansing Michigan, Raleigh NC, or maybe Texas near dallas metro. I'm looking to invest about 100k total between cost and rehab- does anyone have any recommendations for what market BRRRR seems to work best in ? I know it is all finding the right deal, but just wanted a little bit of guidance.
Investor · Topeka, KS · Member since 2015 · 1k+ posts · 1k+ votes
6y
This is a tough question. If there were a handful a great places then lots of people would begin to invest there which would drive up prices which would make them not the best places any more.
That being said, for your first effort I would recommend starting local. There are so many advantages. You are more familiar with the good and bad neighborhoods, more familiar with what properties will rent and sell for, you can drive by and check on progress.
Your first property will be your most risky because you have the least amount of experience you will ever have and often fewer resources to overcome challenges than you will ever have. You should attempt to take advantage of as many advantages as possible.
Investor · Topeka, KS · Member since 2015 · 1k+ posts · 1k+ votes
6y
This is a tough question. If there were a handful a great places then lots of people would begin to invest there which would drive up prices which would make them not the best places any more.
That being said, for your first effort I would recommend starting local. There are so many advantages. You are more familiar with the good and bad neighborhoods, more familiar with what properties will rent and sell for, you can drive by and check on progress.
Your first property will be your most risky because you have the least amount of experience you will ever have and often fewer resources to overcome challenges than you will ever have. You should attempt to take advantage of as many advantages as possible.
Realtor · Raleigh NC and Greensboro, NC · Member since 2019 · 391 posts · 392 votes
6y
@Nicholas Bohm - Raleigh, NC won't work for your numbers if you're referring to buying and rehabbing all-cash. If you're able to get any hard money which would offset your $100k all-in, then you have a chance, however it is a very tough market Given the rent v purchase price discrepancy going on, I'd recommend looking at cities in the "Triad" which includes High Point, Greensboro and Winston-Salem (plus the areas around and within that triangle).
Real Estate Agent · East Lansing, MI · Member since 2016 · 5 posts · 7 votes
6y
Lansing MI. works well for BRRRR. 30K to 50K to acquire and 10K to 50K in updates and repairs. Cash flow is the easier half of the equation in Lansing; the hard part is forcing the property's equity up. You have to choose the house and the contractor with care.
Jacob Sampson- I would invest locally for my first BRRRR property, but I'm based in the bay area California where the cheapest duplexes go for at least 500k.
Real Estate Agent · Dallas, TX · Member since 2016 · 432 posts · 341 votes
6y
@Nicholas Bohm You can count DFW off your list. You're not going to find properties sub 150k unless you're in really rough areas. The higher the price point - the more difficult it becomes to get enough equity in a property to BRRRR. I've seen very few potential opportunities here, however there is a tremendous amount of other opportunities here. But not the spot to BRRRR imo.
Real Estate Agent · Lansing, MI · Member since 2016 · 143 posts · 78 votes
6y
Nick,
I am in the Lansing market and happy to help with locations and recommendations on neighborhoods and price points. What you want to do can certainly be done here but I've seen people get burned by spending too much and not being able to get their expected value on the refinance appraisal. So you do have to know your numbers and partner with a competent agent before starting.
I'm curious to know what was it about those three markets that made you decide to try a BRRRR there?
Investor · Boulder, CO · Member since 2016 · 1k+ posts · 1k+ votes
6y
@Nicholas Bohm I like your train of thought... live where you want, invest where it makes sense. First step is to select the market. Like David asked, what draws you to those 3 markets?
Here are trends I look at in a market:
- Unemployment
- Job growth
- Job diversification
- Pay
- Vacancy trends
- Affordability trends (property values & rents)
- Taxes
- Landlord / tenant laws
Just to name a few... This stacks the investing cards in my favor since I'm investing out of state. And there isn't a perfect market out there. So, if you are educated on these points and can clearly state your case on why the market is good for your investment, then you kinda have to ignore the noise a little.
@David Hall The main thing that got me looking into those three markets are cash on cash return. I know that I can get the most bang for my buck in a lot of midwest regions, but am not entirely set on BRRRR ing a property in say Lansing MI. I might just look into turnkey SFH properties that I can buy 20-25% down in Lansing instead. I would love any recommendations about neighborhoods ect; cause I'm from the Bay Area CA and have limited knowledge about the specific zipcodes ect; Thank you.
Chicago, IL · Member since 2016 · 9 posts · 1 vote
5y
@Nicholas Bohm Curious if you ever got started here and where?
@Whitney Hutten I love this advice of these trends to look at to start comparing areas and neighborhoods to. Where do you tend to source this data? And by what scope (zip code? Greater city region?) Would love to start mapping out some areas I'd ideally want to start doing this in as well.