Have You Noticed MLS Deals Lately

[Kenneth Garrett]

I've noticed in my Northwest Florida Market sellers have finally started to adjust their prices. Just landed a buy at 55K less than asking which actually is almost 100K under market. Needs work. It's great as a BRRRR investor or flipper. It's about time.

Don’t disregard on the market properties.  There maybe a deal there.

Have you noticed any changes in your market?

[Dan H.]

Quote from @Kenneth Garrett:

@Dan H.

I agree. This is very market specific. I see your in California, most likely a difficult market for MLS deals. I'm just seeing a local correction where sellers were selling everything above $300K (probably can't touch things at that price in your market) are now at a price where the BRRRR method is alive again. Much better return than the S&P.

I have made a lot of money on brrrr, but the process in my market, and most other markets, is currently broken at the refinance. The high LTV refi will result in significant negative cash flow in most markets when properly allocating for sustained costs and vacancy.

Add the value then sell with the selling costs and tax implications or keep and let the negative cash flow erode the added value.  It is a rare local investor that is choosing the brrrr; that is the reason for the mass pivot to flipping.

My market has always been exceptional for value adds if you know what you are doing. I added a half bathroom out of existing space nearly 2 years ago on a high value property (ARV $2k psf) and comps showed it added $50k of value. Tough to beat that.

The LTV monthly rent ratio on this property would be below 0.5%. At today's rates this would bleed cash. Fortunately my rate is half of today's rate and I do STR. I hold at lower leverage than my preference and modest cash flow believing the appreciation (combined with the leverage) long term will provide a good return (there is finite beach properties).

Flipping is a job.  Stop flipping and you stop earning.   I do not want to work that hard.

Good luck