Best areas for BRRR's in the South.

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Susan Maneck
Investor · Jackson, MS · Member since 2014 · 1k+ posts · 769 votes
7y

The problem, of course, is there aren't many 'good' school  districts in Mississippi. Clinton  has good schools but the houses there have so many foundation problems you have to be extremely careful. But the cash flow here can't be beat. 

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  • Antoine Martel
    Rental Property Investor · Miami, FL · Member since 2017 · 2k+ posts · 911 votes
    7y

    The south is a big place. Is there a state or city that you have in mind?

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  • Susie LowePro Member
    OP
    Rental Property Investor · Salt Lake City, UT · Member since 2018 · 60 posts · 18 votes
    7y
    @Antoine Martel Yes sorry. I need to be more descriptive. We are looking in Mississippi, North Carolina, Texas. Just trying to see where we need to stop and get a feel for the market before pulling the trigger on rentals.
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  • Antoine Martel
    Rental Property Investor · Miami, FL · Member since 2017 · 2k+ posts · 911 votes
    7y

    Susie.

    Sorry but I don't know those markets very well. MS is a hard state to deal with. TX is getting expensive and so is North Carolina. If you want to do the BRRRR its best to say in markets where the cash flow makes the most sense.

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  • Eviano I.
    Member since 2018 · 20 posts · 3 votes
    7y

    @Antoine Martel based on the markets you know well, what markets would you recommend are cash flowing well now? I've been looking closely at Central MS for the past few months, and I agree based on my criteria (i.e. healthy cash flow in good school districts sub-$150k), it hasn't been as straightforward as I expected.

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  • Susan Maneck
    Investor · Jackson, MS · Member since 2014 · 1k+ posts · 769 votes
    7y

    The problem, of course, is there aren't many 'good' school  districts in Mississippi. Clinton  has good schools but the houses there have so many foundation problems you have to be extremely careful. But the cash flow here can't be beat. 

    1Reply
  • Antoine Martel
    Rental Property Investor · Miami, FL · Member since 2017 · 2k+ posts · 911 votes
    7y
    Originally posted by @Eviano I.:

    @Antoine Martel based on the markets you know well, what markets would you recommend are cash flowing well now? I've been looking closely at Central MS for the past few months, and I agree based on my criteria (i.e. healthy cash flow in good school districts sub-$150k), it hasn't been as straightforward as I expected.

     TN, AL, OH. All of these places have great markets which still have very low property values but high rents and also the states are easy to deal with. 

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  • Christian Brown
    Investor · Oklahoma City, OK · Member since 2017 · 39 posts · 15 votes
    7y

    Hey @Susie Lowe I'm a realtor and investor in Mississippi. I deal with a lot of out of state investors who are interested in the returns that Mississippi can offer, but just like @Susan Maneck said, you have to make sure that you're in the right areas.

    I live and invest on the Mississippi Gulf Coast, home to some of the best school districts in the state. If you can find a good deal in an area with decent schools and out of a flood zone (increased holding costs) then the cash flow is phenomenal. 

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  • Eviano I.
    Member since 2018 · 20 posts · 3 votes
    7y
    Originally posted by @Christian Brown:

    Hey @Susie Lowe I'm a realtor and investor in Mississippi. I deal with a lot of out of state investors who are interested in the returns that Mississippi can offer, but just like @Susan Maneck said, you have to make sure that you're in the right areas.

    I live and invest on the Mississippi Gulf Coast, home to some of the best school districts in the state. If you can find a good deal in an area with decent schools and out of a flood zone (increased holding costs) then the cash flow is phenomenal. 

    Thanks Christian. If you don't mind my asking a very basic question, are there many properties on the coast that aren't in flood zones? I grew up in Jackson and was there during Katrina, so I just assumed that every property on the coast would be in a flood zone given climate patterns these days. (Again, I know I'm being overly simplistic and generalizing, which is always dangerous). If so, do you increase your maintenance / rehab estimate when you analysis properties for the inevitable storms that will come periodically? Any experienced insight for a rookie would be much appreciated.

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  • Avery CarlBusiness Member
    Real Estate Agent · USA · Member since 2016 · 909 posts · 1k+ votes
    7y

    I grew up in Mississippi. You're going to have a difficult time finding cash-flowing properties in "good" school districts, as there aren't very many good school districts.  Are you ok with low income? Mississippi presents some great opportunities there if you have any interest in going that route. Memphis is right on the TN/MS state line, and a lot of the Memphis suburbs are actually in Mississippi, so those towns like Olive Branch and Hernando might be great options.

    About half of my portfolio are short term rentals in the Smoky Mountain area of TN. It's not a great place for BRRR's necessarily as it's a pretty sought after STR market and those deals are a little harder to come by, but our returns have been great.

    @Josh Feit knows a ton about Atlanta.

    @Christian Brown You have piqued my interest. Would love to hear some more about the coast.

    @Susan Maneck I have read several of your posts over the past few weeks about Jackson. The Fondren area seems to be pretty up and coming, I'd be interested to hear your thoughts on investing for buy and hold there, and your Jackson experience in general.

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  • Pat HeidingsfelderBusiness Member
    Real Estate Broker · Biloxi, MS · Member since 2016 · 169 posts · 92 votes
    7y

    I'm also a BRRRR investor and Realtor on the Mississippi Gulf Coast primarily in Biloxi. @Avery Carl what part of MS did you grow up?

    @Susie Lowe I think the biggest part of trying to do some BRRRR type investing outside of your local market is finding a good team, not only finding an agent that knows about BRRRR'ing, but good contractors, management, etc.

    @Eviano I. As for flood zones, you'll have to work with a good agent or really comb the flood maps.  There are some great areas very close to the beach that are NOT in flood zones, but the house next door will be.  Also, flood zones aren't as scary as most people assume, as @Christian Brown mentioned it'll just add a little to your monthly expenses depending on the area, elevation, etc.  

    Short term rentals are a great option in our area, a large portion of our economy is based on tourism, I've worked with a few investors to buy local condos and SFR for STR. You'll definitely want to check local city regulations, a few coastal towns have been cracking down on them.

    Here are a couple of photos of my current BRRRR rehab!

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  • Susan Maneck
    Investor · Jackson, MS · Member since 2014 · 1k+ posts · 769 votes
    7y

    @Susan Maneck I have read several of your posts over the past few weeks about Jackson. The Fondren area seems to be pretty up and coming, I'd be interested to hear your thoughts on investing for buy and hold there, and your Jackson experience in general.

    I wouldn't describe Fondren as 'up and coming.' It is an old and prestigious neighborhood and houses are pretty pricey there. I invest in working class neighborhoods in South Jackson where the houses are nice but the returns are better. Besides, I live there. I'm starting to acquire properties in Byram. The only area I avoid completely is West Jackson. 

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  • Avery CarlBusiness Member
    Real Estate Agent · USA · Member since 2016 · 909 posts · 1k+ votes
    7y

    @Pat Heidingsfelder Starkville!

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  • Avery CarlBusiness Member
    Real Estate Agent · USA · Member since 2016 · 909 posts · 1k+ votes
    7y

    @Susan Maneck See? I don't know anything about it haha.

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  • Sterling Fields
    Brandon, MS · Member since 2017 · 40 posts · 26 votes
    7y

    @Susan Maneck I would agree completely with you on the West Jackson. It is a war-zone. Although I would have to slightly disagree on the Fondren analysis. The neighborhoods to the north between Old Canton and State Street are exactly as you describe (prestigious and pricey), but the actual central area of Fondren is seeing a decent amount of money flowing into it (The new 125 room Homewood Suites hotel ($15M) being one example). 

    Although (slightly conflicting what i said above) @Avery Carl, I personally would not pursue this area too heavily right now because there are a ton of rentals in the area. One look at Zillow and you will see what i mean. I own a 4-plex in Fondren and it took a bit of work to get it fully leased(charging the same rents as everyone else in the area), and it is much nicer than most of the product around there. BTW Go Dawgs!

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  • Susan Maneck
    Investor · Jackson, MS · Member since 2014 · 1k+ posts · 769 votes
    7y

    I would think renting in the Fondren area would not be so much of a problem because of its location near Milsaps and Bellhaven. Then, of course, there are the hospitals. I wonder if you weren't having problems because it was the wrong time of year? I'm a JSU Bengali Tiger, btw, but when it comes to basketball season I'm Lady Dawgs all the way! 

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  • Christian Brown
    Investor · Oklahoma City, OK · Member since 2017 · 39 posts · 15 votes
    7y

    @Eviano I. I don't mind at all. There are several properties on the coast that aren't in a flood zone. There are some people who prefer to live on waterfront properties, so there are homes that suit them. There are some people who prefer acreage and big back yards, so there are homes to suit them as well. I'm personally renovating one home in a flood zone with the intentions of selling (comps are high in the area because of the waterfront location) and renovating another home that's a simple 3/2 on a slab that isn't in a flood zone. 

    I recommend staying away from homes in flood zones if you plan to rent simply because of the additional holding costs that come with flood insurance in flood zones. While some of these storms are inevitable, my current residence didn't flood during the storm. Just be mindful of the area.

    @Avery Carl I'll send you a PM and we can discuss.  I go back and forth from the Coast to Starkville. Definitely a difference in the way the locations operate lol

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