Updated over 7 years ago on . Most recent reply
BRRRR in Cleveland And Akron?
Hello BP community!
I am currently looking to get into multi family rental property using the BRRRR method. I'm looking at properties in the Cleveland and Akron areas of northeast Ohio. A duplex can be had most times for 10k-20k and sometimes even less. They all obviously need rehabbed. I am just worried that once I buy and rehab I wont get a high enough ARV to refinance. I can't find any good comps, It seems a lot of the properties sell at this price and none are selling that are turn key and freshly rehabbed. Neighborhoods aren't the greatest but rents go from 450-650 atleast. None I can find on zillow are rehabbed so I'm not really sure what the arv will be. I don't want to go off the zestimate because we all know what a crock that is! My goal is to be all in on any given property for under 25k with purchase and rehab which I think is doable. I would like to see atleast a 50k-60k arv. I will do most of the rehab myself with my partner (my father in law). Anything we can't handle will be directed to my contractor who is a good friend of mine. As I've read it seems like for any bank to refinance the property will have to be worth atleast 50k. Hopefully someone from the area can chime in and help me out. Any help would be greatly appreciated! Thanks again.
Most Popular Reply
Does anyone every take time to consider just how much rehab a 10-20K property requires?
Not to mention these are rough neighborhoods. Even if you fix it up I can bet your going to face on going issues. My main concern is you'll probably get broken into during the project and have things stolen.
You will find that your going to get very bottom of the barrel properties which require a lot of money, so refinancing them you've still got a large percentage of capital tied into their even at 70% of the ARV. Plus still remember your in a bad area so thats capital you may not recover should something go wrong down the line.