New investor from Spain interested in BRRRR in the US – how should I start?

[Borja Antolin Pargada]

Hi everyone! 👋

I’m Borja, based in Spain, and I’m starting my journey in real estate investing with a strong interest in the BRRRR strategy. My long-term goal is to build a portfolio of cash-flowing properties in the US that I can manage remotely, generate income in USD, and scale over time.

I understand the basic concept of BRRRR, but as an international investor, I'm still trying to figure out how to start the process from abroad. Specifically, I’d love guidance on:

• How to research and select the right US market for BRRRR (landlord-friendly, good cashflow potential)

• How to build a trustworthy local team (agent, lender, contractor, property manager) while living overseas

• How financing typically works for non-US residents doing BRRRR

If you’ve gone through this process or worked with foreign investors, what steps would you recommend taking first? Any mistakes to avoid?

I’m looking forward to learning from this community and sharing my own journey along the way. Thanks in advance for your advice! 🙏

[Michael Smythe]

Quote from @Borja Antolin Pargada:

Quote from @Michael Smythe:

@Borja Antolin Pargada 

Recommend you first figure out the property Class you want to invest in, THEN figure out the corresponding location/neighborhoods to invest in.

Why is Property Class so important for investors to understand and apply in their investing strategies?

Because the Property Class dictates the Class of the tenant pool that the property will attract.

The Tenant Class greatly impacts rental income stability and property maintenance/damage by tenants.

Both Property Class and Tenant Class affect what type of contractors, handymen and property management companies will work on a property.

If you buy & renovate a property in Class D area to Class A standards, what Tenant Class will rent it?

Or, if you put several Class D tenants in a Class A four-plex, what do you think will happen to the property?

So, if you fail to apply the correct assumptions to a property, your expectations won’t be met and it may even be a financial disaster.

We use the following to rank Property Classes, in order of importance:

• Property Tenant Pool: closely linked to location, but not always.
• Property Location: closely linked to tenant pool, but not always.
• Property Condition & Amenities: it’s important to, “Maintain to the Neighborhood.”

Key metrics for each Property Class:

Class A Properties:
Tenant Pool: Majority of FICO scores 680+, no convictions/evictions in last 7 years.
Tenant Default: 0-5% probability of eviction or early lease termination.
Section 8: Class A rents are too high and won’t be approved.
Vacancies: 5-10%, depending on market conditions.
Cashflow vs Appreciation: Typically, 3-5 years for positive cashflow, but you get highest relative rent & value appreciation.

Class B Properties:
Tenant Pool: Majority of FICO scores 620-680, some blemishes, no convictions/evictions in last 5 years.
Tenant Default: 5-10% probability of eviction or early lease termination.
Vacancies: 10-15%, depending on market conditions.
Cashflow vs Appreciation: Typically, 1-3 years for positive cashflow, balanced amounts of relative rent & value appreciation.
Section 8: Class B rents are usually too high for the Section 8 program.

Class C Properties:
Tenant Pool: Majority of FICO scores 560-620, many blemishes, but should have no convictions/evictions in last 3 years. Verifying recent 2-years of rental history very important! Same for 2-years of job/income stability.
Tenant Default: 10-20% probability of eviction or early lease termination.
Section 8: Class C rents usually meet program requirements, proper screening still recommended.
Vacancies: 10-20%, depending on market conditions and tenant screening.
Cashflow vs Appreciation: Should cashflow immediately, at the lower end of relative rent & value appreciation.

Class D Properties:
Tenant Pool: Majority of FICO scores under 560, little to no good tradelines, lots of collections & chargeoffs, but should have no convictions/evictions in last 12 months. Verifying last 2-years of rental history and income/employment extremely important to find the “best of the worst”.
Tenant Default: 20-30% probability of eviction or early lease termination.
Section 8: Class D rents meet program requirements, often challenges to pass Section 8 inspection.
Vacancies: 20%+, depending on market conditions and tenant screening.
Cashflow vs Appreciation: Typically, all cashflow with little, maybe even negative, relative rent & value appreciation.

Where did we get our FICO credit score information from?

Check out this chart:

FICO Score	Pct of Population	Default Probability
800 or more	13.00%	1.00%
750-799	27.00%	1.00%
700-749	18.00%	4.40%
650-699	15.00%	8.90%
600-649	12.00%	15.80%
550-599	8.00%	22.50%
500-549	5.00%	28.40%
Less than 499	2.00%	41.00%

Source: Fair Isaac Company

Make sure you understand the Class of properties you are looking at and the corresponding results to expect.

Metro Detroit has 132 cities, the City of Detroit 183 Neighborhoods, which we’re analyzing and classifying. 

Hi Michael, thanks for breaking down the Property Class concept — it makes perfect sense now how it directly impacts tenant quality, income stability, and even the kind of management team you can work with.

Since my plan is to invest fully remote from Spain, I want to target markets and property classes that balance stable cashflow with manageable risk, even if that means starting with Class B or C rather than going straight to Class A.

From your experience, which markets or property classes have you seen work best for international investors doing BRRRR remotely? And do you think it's realistic to build the right local team for this without ever visiting in person?

Thanks for the offer to DM — I might take you up on that once I have a shortlist of target markets.

 Where to invest is a challenging question as almost everyone here will be biased or just giving their opinion.

Very few will be able to offer actual facts that differentiate markets beyond some latest "buzz".

Check out our blog about Metro Detroit here on BP, where you can explore the history of the updates we've provided.

Be sure to also spend some time on the Deep Dives we've done on specific Detroit Suburbs & Detroit City Neighborhoods. NO ONE ELSE HAS DONE THIS FOR ANY OTHER MARKET!

https://www.biggerpockets.com/member-blogs/3094-royal-rose-p...