Out of State BRRRR Experience
Happy weekend! Curious who is doing out of state BRRRRs. I live in San Diego and don't quite have the capital to do a BRRRR in this market. Obviously finding trustworthy contractors is key which is the part that makes me nervous. From those of you who have done this, I would love to hear about your experience and any tips you've learned along the way.
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@Jennifer Kessler I live in Phoenix, Arizona and invested into Durham, North Carolina on two duplexes as a BRRRR deal. First investment and I understand the nervousness :) However it is entirely possible. What cost me $200k for two duplexes would have cost much more in my local area.
It is not the only way, but it is useful starting out to be able to recycle capital. My team and I went on to complete two more duplex BRRRR's before moving up to larger properties.
Advantages to BRRRR out of state:
- Lower cost
- Market advantage - buy in expanding market
- Build better investor skillset due to remote
- Reuse equity and scale faster
Disadvantages to BRRRR in general :
- Difficult for new investor to accurately define After Repair Value
- Difficult to find properties meeting criteria
My tip would be don't hunt the BRRRR to simply pull out all your equity. Sometimes it's better to leave some equity in there to cashflow or have a buffer in case of "insert issue here".
Use a team, get many reviews. Leverage other's experience. Don't assume anything.
If interested, you can read about my story here : https://www.biggerpockets.com/... or even review some of the deals we did : https://www.biggerpockets.com/...