First BRRR in State or out of State?

Question

I am a newbie to the investment world. I plan on using a HELOC for my cash buy. I would like to do the BRRR method. The issue I am running into is my market right now is very strong. Houses are going for very high, solid prices. It's been difficult finding ones that need a little work (rehab) to them. The ones I do find would be outside my cash buy range bc of the market. I have been looking in other states such as Kansas, Dallas/Ft. Worth areas, Tampa, etc. With what I've read it's best to do your first BRRR in state so you can control the rehab and work with lenders and contractors I currently have a relationship with. Work the kinks out, so to speak. Any suggestions?

Anson Young · Answer

Well, thats a very personal decision.. it depends on your situation, how adverse you are to risk, etc...  if deals arent working in your area, what do you do?  You either go out of your area, or you dont invest.  I think out of state investing can be just fine for your first deal, its much harder of course, and much more stressful.  I'd recommend David Greene's book "long distance real estate investing" this is exactly what you need to mitigate the risks and headache of out of state investing.

Kerry Baird · Answer

I was glad to  renovate my first few in the area local to me.  I learned a lot by watching the work progress, and was able to head off issues by being on site. In my case, my lead carpenter bought drugs for the crew.  If I had been remote, I wouldn't have seen the gaps when no one was on site, nor the outcome of having the drug involvement.

Nic F. · Answer

Thank you @Anson Young, I appreciate the feedback! I am excited to take the next step, also a bit nervous. I am in my late 30's and don't want to put off investing too much longer, I'll read the book you recommended!