Investor · San Francisco Bay Area · Member since 2020 · 22 posts · 7 votes
I've looked at quite a few homes in an area I'm interested in with the hopes of finding a good BRRRR deal.
I find a home that needs some serious rehab and that seems to be priced a good amount under comps. But when I run the numbers, I would need an offer accepted at 15 to 20 percent below asking to get a good return.
What's my best action here? Do I make a bunch of low ball offers and hope one is accepted? I want to have reasonable expectations of my realtor especially since I'm out of the area and am leaning on them for extra support.
This is my first real estate purchase. I'm happy to be patient but also don't want to waste anybody's time if this just isn't the right market.
I might caution against using the BRRRR method right off the bat if you have not purchased real estate first. Finding reputable people or having to do repairs can be daunting.
If you feel confident, I would maybe make a few lowball offers, but not too many if you feel you are wasting your realtor's time.
I might caution against using the BRRRR method right off the bat if you have not purchased real estate first. Finding reputable people or having to do repairs can be daunting.
If you feel confident, I would maybe make a few lowball offers, but not too many if you feel you are wasting your realtor's time.
I agree with @Alex Zhao on his suggestion. BRRRR might be a tough strategy to implement if you've not purchased your first real estate deal. From my personal experience with dealing with out-of-state Realtors (I'm in Hawaii, looking to purchase properties in Texas), they weren't familiar at all with the BRRRR strategy. I had to explain to them what I was looking for and the price ranges I needed to operate in.
I would say that it's important to tell people exactly what you're looking for, in this case the Realtor, and let them decide if he/she would want to be a part of your team. It helps to give them metrics and parameters of properties you're interested in. The really important aspect of BRRRR, in my opinion, is the concept of the 'Team' and building an effective unit where they all work together to achieve your goal. I hope that helps.
I feel tell your agent upfront your a investor. Then you have to offer what makes sense for you business model. Just to give you a idea I recently made a offer it was listed at $80 k on Mls offered $63,5 k and was excepted. You have to go for it all they can say is no.