Hola hola people! 

My name's Lio - and I'm interested in building wealth through real estate investment. A little about me, I'm natively from Cuba but moved to the US as a kid. After high school in Miami, I joined the Navy and traveled pretty much all over the world. I've also lived overseas (Sweden), and now reside in Austin, TX. I'm in high-tech, and my wife's a nurse, so that's that.

So what brings me here? I've been lucky enough to purchase my primary residence with little out of pocket thanks to the VA Homeloan, so we are now looking into investing in real estate as a way to bring in extra income, whether passive or through flipping.

I'm interested in BRRRR as a strategy for building our portfolio. My goal's to buy and hold 5 properties in the next 3 years, and flip some where it makes sense. I'm still in the learning phase but I've given myself until late April/early May, to purchase our first property.

My target is 2/2 or 3/2 distressed properties <$200K that don't need MAJOR overhauls to begin with. I know this limits me quite a bit in the Austin market, given prices here, but I think the outskirts of the cities could still work. Mainly looking at the north areas, RR, Pville, Hutto, etc... I'm also interested in the western Houston areas, Katy/Cypress for the prices of homes there, and I have family locally as well.

I'm looking to learn as much as possible from this community and connect with people that could help me in this endeavor. Suggestions for real estate investor friendly agents for these areas would be great to begin with.

Cheers! 

Lio.

@Liosbel Gonzalez It will be very difficult to find the properties you are targeting in the Austin area even on the outskirts. Also, if the properties don't require a major facelift, you likely won't increase enough equity to BRRRR your money back out. However, I do believe you can find solid investments in Austin with good criteria and patience.

If you want a true BRRRR market, you ideally want somewhere where the median price point for homes is $150,000 or less. Whatever you decide, just go for it!

@Ryan Kelly , thanks for the feedback. Would you say the Austin market lends itself more to flipping?

I guess I should clarify that I’m not afraid of rehabbing properties, but in my mind major means a complete makeover and I will most likely be bootstrapping my first property. Not just for the money, but to get firsthand experience of what it takes. I do have a friend with a lot of construction experience that I can partner with or get guidance from.

Houston does offer more properties that meet my criteria, but it just complicates the rehab logistics. I'd prefer to stay local for my first one, but if that's what it takes, so be it.

Can you go deeper on why a $150K median is better for BRRRR?

Thanks!

@Liosbel Gonzalez AUSTIN has been a strong market for flipping as you have solid appreciation tailwinds. I know many successful flippers who are very experienced. Margins are getting tougher as it's harder to get the discounts on the buy side. There is a lot of competition.

Regarding BRRR, that strategy is all about percentages. An ideal BRRRR requires your all in budget (purchase + renovations) to be no more than 75% of the new market value, which is what the bank will give you when you refinance, so you get the money you've invested back. The percentages work better on lower-priced properties. For example, if your total lower-priced home investment is $100,000, you only need the home's new market value to be $134,000, which could be achievable. However if your total investment is $250,000, you now need the market value of the home to be approximately $335,000, much higher, which may not be as achievable. Essentially, BRRRR gets harder the more expensive the properties get. I hope this is helpful.