hello, my name is Bentley, and I am just starting out in the Atlanta market and was wondering what kind of techniques y'all have been successfully applying into this growing area. Im trying to implement the BRRRR strategy. Am I wasting my time or just looking in all the wrong places?
@Marc Brenner is absolutely correct. The only way you're going to find a great BRRRR in such a hot market is to look in the Atlanta suburbs and create your own lead generation funnel. Market prices are simply too inflated at the moment for a decent enough spread on a BRRRR.
Another thing to keep in mind is your timing here. Just because many have found success from BRRRRs in the past decade of expansion does not mean it is an appropriate strategy now. With so much uncertainty, no one has any clue what will happen to prices in the next year or even the next few months. Since the BRRRR strategy relies so heavily on that third "R," you're taking on a huge amount of risk by dumping your money or, even worse, other people's money into a property. It will take a couple of months for the rehab, depending how much is needed. Then you'll likely need a 6 month seasoning period. So, that puts you at 8 months from now. No one has the slightest clue what the housing market or lending will look like in 8 months.
The answer probably isn't to just give up and go sit on the couch until everything calms down, but you definitely want to factor this added risk into your analysis. Maybe add a decrease in ARV assumption to all your calculations? Or perhaps increase your ROI criteria? Anything but blindly following what has worked for the past decade would be a good call.
And please, feel free to message me anytime if you have questions or just want to chat!
BRRR is a great strategy for both new and experienced investors. It allows you to accelerate your growth while mitigating risk through long term rentals. Atlanta is a great market, and single family investing can be very dependent on the local market. My advice is to find a good middle class neighborhood that is growing but still has good rent rates and affordable properties. Build a team there then get started. Good luck!
Hey @Bentley Denman , you're only wasting your time if you're looking on the MLS for BRRRR deals in Metro Atlanta. The market is way too hot for that. I recommend identifying a smaller secondary market near Atlanta or directing a portion of your capital to a direct-to-seller campaign. Best of luck - Marc.
@Marc Brenner is absolutely correct. The only way you're going to find a great BRRRR in such a hot market is to look in the Atlanta suburbs and create your own lead generation funnel. Market prices are simply too inflated at the moment for a decent enough spread on a BRRRR.
Another thing to keep in mind is your timing here. Just because many have found success from BRRRRs in the past decade of expansion does not mean it is an appropriate strategy now. With so much uncertainty, no one has any clue what will happen to prices in the next year or even the next few months. Since the BRRRR strategy relies so heavily on that third "R," you're taking on a huge amount of risk by dumping your money or, even worse, other people's money into a property. It will take a couple of months for the rehab, depending how much is needed. Then you'll likely need a 6 month seasoning period. So, that puts you at 8 months from now. No one has the slightest clue what the housing market or lending will look like in 8 months.
The answer probably isn't to just give up and go sit on the couch until everything calms down, but you definitely want to factor this added risk into your analysis. Maybe add a decrease in ARV assumption to all your calculations? Or perhaps increase your ROI criteria? Anything but blindly following what has worked for the past decade would be a good call.
And please, feel free to message me anytime if you have questions or just want to chat!
@Zach Westerfield @Marc Brenner. I'm a BRRRR investor with a great prop mgr and contractor in Atlanta and I've bought a few good deals within the perimeter in the last year. Do you have any suggestions on good locations just outside the perimeter? Also, I've got a budget for some marketing. How would you suggest I get started with a targeted campaign if I don't have an acquisitions guy on the street? I'm based in Az.
@Zach Westerfield, excited for you. It is certainly doable in the Greater Atlanta market.
In the 15 months, we have BRRRR'd 10 properties in Tucker, Smyrna, Kennesaw, Woodstock, Westview, Florida heights, and College Park. Some were prefect BRRRRs, for some, we got paid $2K in the refinance, and some have small capital stuck ($3K-$14K). All cashflow great.
The 6 month seasoning period starts from the day you cash close and not once your rehab is done unlike what @Brenden Mitchum said. I agree with @Brenden Mitchum that there's a possibility of change (both favorable and unfavorable) in your ARV in those 6 months.
To manage the risk of ARV uncertainly, we refi our projects within 2 months (Yes, with conventional loans and not non-qualified or Hard Money ones). Your transactions need to be structured a certain way to get around the 6 month seasoning period requirement for the conventional loans. Please connect with me and I can walk you through it if you are interested.
Hey @Bentley Denman , you're only wasting your time if you're looking on the MLS for BRRRR deals in Metro Atlanta. The market is way too hot for that. I recommend identifying a smaller secondary market near Atlanta or directing a portion of your capital to a direct-to-seller campaign. Best of luck - Marc.
Marc I would actually have to completely disagree with you on this one. I have had great success finding my investors deals on MLS. If it is such a hot market would you not want to be open to all sources of deal flow as long as you re able to vet them out? As an investment brokerage/ wholesalers we actually get a lot of our properties off the MLS we just spend our full time being the first to those deals and building relationships with agents to the point where they favor working with us. I do agree that it is difficult to find deals on the MLS but that could very well be because companies like myself could be getting to them before the general population even has access to the deal.
@Bentley you will have great success in the Atlanta market if you keep 1 thing in mind. A true BRRRR** is supposedly when you are able to cash out refi all of your investment from a deal and make an infinite return on a property. Tell me if this sounds logical at all. I agree that markets have arbitrage opportunities, but do they really run so inefficiently as to provide someone with an infinite return. Of course there are exceptions and you very well could find a * True BRRRR*, but for the sake of building a business you don't base your strategy off of luck. In the Atlanta Market when looking to grow your rental portfolio set a bar realistic bar that will have 10-30k into a deal and aim for a 15-25% CoC return. that is not absurd to achieve and you can do it all day vs just once in a blue moon. I hope this helps align your expectations in the Atlanta market and helps along the way of building your portfolio.
@Kalim Kalla of course there are good deals on the MLS. I was speaking specifically about acquiring deals on the MLS at a low enough price to pull all of your capital out after refi. Would love to see a case study of a deal you've recently found on the MLS that was a true BRRRR. Also I don't know what to make of that word salad in your second paragraph. Seems to me you are advising him to set lower expectations on how much capital he'll be able to pull out which is fine advice, but then we aren't really talking about a full BRRRR if there is 30k tied up in the deal are we?