Good BRRRR markets for under $80k

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Good BRRRR markets for under $80k

Investor · Hayden, ID · Member since 2020 · 29 posts · 36 votes

I have an $82k HELOC and wanting to start out of state BRRRR. What are some good markets for this? I was thinking Ohio, Texas, or Florida, but I've been warned that Florida might be too expensive right now. Thanks in advance!!!

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Owen DashnerPro Member

Lender · Omaha, NE · Member since 2008 · 1k+ posts · 1k+ votes

There are several markets in the midwest where you could do this. The bigger question is, where do you have the connections to complete and manage this of investment?

I just completed a BRRRR on Friday in Omaha where we bought a SFR for $68K, put $5K into it by adding a couple closets, painting and replacing a stove. It rented for $995, it appraised for $100K, and we did an 85% LTV cash out refi.

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Aidan McGee
Rental Property Investor · Madison, WI · Member since 2020 · 18 posts · 14 votes
6y
Another good location for investing in the Midwest is Milwaukee. There are a ton of properties for sale at a low price point. There are two major universities, so there are many students looking for housing. I would recommend doing a lot of research on the location, as there are many areas that are what some would call "warzones." I have seen many forum posts about Milwaukee being great for cashflow, with some investors seeing rents at 2-4% of the purchase price. Which absolutely crushes the 1% rule!
2 Reply
Kimberly Kesterke
Investor · Marietta, GA · Member since 2016 · 98 posts · 168 votes
6y
@Jordan Rhoads If you are open to attractive secondary markets- Augusta, GA would be a great place to look. Specifically the Harrisburg neighborhood. I've done several turnkey flips in that area- With $82K you may not even have to refinance with debt- just recycle the cash you have available.
Great post. Thank you for sharing.
5 Reply
Marcus Auerbach
Investor · Milwaukee - Mequon, WI · Member since 2010 · 5k+ posts · 7k+ votes
6y
@Jordan Rhoads the grass is not always greener on the other side! It's not easy to find a good BRRRR project and if you are looking outside of your hometown you are always competing against locals, but with a long distance handicap. Dig deeper, you'll find a deal!

@Aidan McGee I wish there would be 2% to 4% deals! The forum posts you have seen may be a few years old and also refer to "investments" in the hood. Milwaukee has seen good appreciation over the last years, median home price is creeping up into the 190k range. A decade ago 2% was possible, now you are doing great if you find a full 1% in a quality area.
2 Reply
Ryan Gandy
Real Estate Consultant · Cincinnati, OH · Member since 2020 · 28 posts · 8 votes
6y
@Kimberly Kesterke Hi Kim, are there any other markets in Georgia, South Carolina or TN you would suggest looking at? I'm from Georgia and wouldn't mind investing there. Thanks!
0 Reply
Kenneth Mooney
Rental Property Investor · Augusta, GA · Member since 2016 · 348 posts · 171 votes
6y
@Kimberly Kesterke I second this! One of the best markets in the nation in my opinion.
1 Reply
Aidan McGee
Rental Property Investor · Madison, WI · Member since 2020 · 18 posts · 14 votes
6y
@Marcus Auerbach
Yeah that would make sense. Got some of that information out of a podcast on BiggerPockets from 2014.
1 Reply
Kimberly Kesterke
Investor · Marietta, GA · Member since 2016 · 98 posts · 168 votes
6y
@Ryan Gandy- All of my experience is in Augusta even though I live in Atlanta. I like Augusta for these reasons:
1. Low cost of entry compared to Primary markets (i.e. Atlanta, large cities, etc)
2. Great tenant base- Ft. Gordon, Medical District, Medical College of Georgia, Augusta State University- new data center coming, etc.
3. Proven market- I've been there for 15 years and have experienced very low vacancies.
If I were to look at other areas because I do believe its time to diversify- I would look into Chattanooga, TN or Birmingham, AL
4 Reply
Phillip Vera
Rental Property Investor · Augusta, GA · Member since 2019 · 129 posts · 112 votes
6y
@Ryan Gandy @Kimberly Kesterke I third the Augusta market! Augusta has proven to be a fairly insulated market in economic and real estate dips or downturns. It also is large enough where it allows for just about any real estate investment strategy (BRRR, cash flow, appreciation, etc.). Piggybacking off Kimberly's post, it's a very proven market with low cost to entry. There's also some major manufacturing, cyber command, and nuclear energy that add a ton of jobs and renters to the mix. It's been a lagging market in appreciation and rental rates, but that's increasing by the month. There's also North Augusta and Aiken markets close by that add for some additional investment opportunities.
1 Reply
Michael Marchman
Attorney · San Antonio, TX · Member since 2018 · 47 posts · 28 votes
6y
@Phillip Vera @Kimberly Kesterke I’ll piggyback on as well for the Augusta market. I’ve been stationed here for about 3 years and have been able to acquire a handful of rentals that cash flow and a few flips along the way as well!
1 Reply
Ryan Gandy
Real Estate Consultant · Cincinnati, OH · Member since 2020 · 28 posts · 8 votes
6y
@Kimberly Kesterke awesome, thanks for the insight and advice!
0 Reply
Joe Cassandra
Rental Property Investor · Woodstock, GA · Member since 2017 · 517 posts · 772 votes
6y
If we're talking about GA (where I am too), a member on here (Aundrea Newbern) also recommended Brunswick near the coast.
She says it's a Federal training area so officers go there for training and need rentals.

https://www.biggerpockets.com/forums/553/topics/563123-investing-in-southeast-georgia

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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
6y
Originally posted by @Account Closed:
@Jordan Rhoads
There is so much risk in this business already, that I will never understand why people want to do their 1st BRRRR out of state! Heck, you say in your profile you have 4 kids and want 8? You must have a very understanding wife to take on this risk. I'm not trying to shy you away if that's what you need to do, but why not cut your teeth on at least 1 property in your area where you can visit it, and learn hands-on?
YUP nothing riskier..

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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
6y
Originally posted by @Jordan Rhoads:
@April Littleton thanks for the advice. I actually have a realtor in my area and I've had notifications for months in my area and even in Washington which is close to me. It's hard to get a property to cash flow positively in my area and nearly impossible to BRRRR. It would pain me to not be able to use the BRRRR strategy because I believe it's superior to most others.
Another reason I want to do out of state is that I don't want to have to physically leave my family to check on properties and rehabs. I want to be available to help my wife with the little ones at home. I'd rather spend twice as much time managing from my laptop than having to leave the house constantly leaving my wife alone with 4 screaming children. Lol. To each his own but I still think for us personally that out of state is a better option. Thank goodness there's an excellent book by David Greene which tells you exactly how to invest out of state or I'd never feel comfortable doing it.
Not to be a debbie downer but reading a book and executing this strategy is very different..

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Mike D'ArrigoPro Member
Turn key provider · San Jose, CA · Member since 2010 · 4k+ posts · 3k+ votes
6y
@Jordan Rhoads I would definitely have Indianapolis and Kansas City on your short list. Both are very affordable markets. Be careful of cheap properties in low end neighborhoods though. Cheap isn't better. Check out my blog on here to see why.
https://www.biggerpockets.com/member-blogs/3992/71639-do-cheap-properties-really-cash-flow-bett
1 Reply
Jordan Rhoads
OP
Investor · Hayden, ID · Member since 2020 · 29 posts · 36 votes
6y
@Jay Hinrichs, I truly appreciate the honesty. I do have some experience managing a commercial contractor locally (building out a Restaurant) and doing my own cosmetic rehabbing on my house. I know this isn't the most applicable experience but it's a little better than nothing.
What parts of the BRRRR strategy would you say are the most concerning for a new out of state investor? To me it's the purchase and rehab for which I'd have to rely on photos/videos and other people.
0 Reply
Pablo Ramirez
New to Real Estate · Chicago · Member since 2019 · 11 posts · 4 votes
6y
@Mike D'Arrigo
Excellent post Mike. Thank you for sharing. Your writing is noticed and appreciated!
0 Reply
Mike D'ArrigoPro Member
Turn key provider · San Jose, CA · Member since 2010 · 4k+ posts · 3k+ votes
6y
Originally posted by @Pablo Ramirez:
@Mike D'Arrigo
Excellent post Mike. Thank you for sharing. Your writing is noticed and appreciated!

Thanks Joe, hope it helps.

0 Reply
Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
6y
Originally posted by @Jordan Rhoads:
@Jay Hinrichs, I truly appreciate the honesty. I do have some experience managing a commercial contractor locally (building out a Restaurant) and doing my own cosmetic rehabbing on my house. I know this isn't the most applicable experience but it's a little better than nothing.
What parts of the BRRRR strategy would you say are the most concerning for a new out of state investor? To me it's the purchase and rehab for which I'd have to rely on photos/videos and other people.
were it becomes difficult is the scope of the job in most instances.. your trying to do a 60k rehab for 25 to 30k to make your numbers work and there are not a lot of contractors that take on these small jobs. those that do tend to be under capitalized and U have to front materials and pay for labor etc.. and you run the risk of them not finishing etc.. it can be done.. but first time out of the gate is pretty risky given what your price points are.. Its not like hiring a contractor for 100 to 200k renovations or new builds that are going to make 15 to 20k net on the job.. have their own accounts and get paid for work in place etc..

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Mike Cordova
Riverside, CA · Member since 2020 · 24 posts · 11 votes
6y
@Jordan Rhoads
I’m in your exact situation... I was also thinking of Florida because I have a cousin that Is a custom home builder in Ocala. Let me know if you decide to start there. I’d be happy to partner.
1 Reply
James York
Member since 2020 · 137 posts · 158 votes
6y
@Michinori Kaneko I believe it’s a function of the percentage of available credit used. I experienced the same and looked in to it. $90k out on a $300k heloc probably does little to your credit. $90k on a $95k heloc is approaching maxed out. I was told under 50% shouldn’t impact credit.
1 Reply
Jordan Rhoads
OP
Investor · Hayden, ID · Member since 2020 · 29 posts · 36 votes
6y
@Jay Hinrichs. Thank you. Very insightful! I'm thinking I'll contact a bunch of contractors before I close on anything to make sure I have a good number of them willing to bid on a small project. I was already planning on ordering the finish materials myself and paying the GC in short installments as they go leaving a good chunk unpaid until it was all finished. I also wanted to give them a bonus if they finished on time and a penalty if they went over. I'd feel a little more comfortable with these arrangements. I am still considering partnering or finding a mentor (paid or unpaid) at least for my first since it is risky. Either way I'll make sure I have enough reserves to cover me if the deal doesn't work out like planned.
0 Reply
Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
6y
Originally posted by @Jordan Rhoads:
@Jay Hinrichs. Thank you. Very insightful! I'm thinking I'll contact a bunch of contractors before I close on anything to make sure I have a good number of them willing to bid on a small project. I was already planning on ordering the finish materials myself and paying the GC in short installments as they go leaving a good chunk unpaid until it was all finished. I also wanted to give them a bonus if they finished on time and a penalty if they went over. I'd feel a little more comfortable with these arrangements. I am still considering partnering or finding a mentor (paid or unpaid) at least for my first since it is risky. Either way I'll make sure I have enough reserves to cover me if the deal doesn't work out like planned.
Just curious why dont you work in Spokane we have done pretty well there with some flips in the past
and you can buy stuff for not a lot more money than what your talking about here.. and then its just a 30 to 45 minute drive for you ??

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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
6y
Originally posted by @Marcus Auerbach:
@Jordan Rhoads the grass is not always greener on the other side! It's not easy to find a good BRRRR project and if you are looking outside of your hometown you are always competing against locals, but with a long distance handicap. Dig deeper, you'll find a deal!

@Aidan McGee I wish there would be 2% to 4% deals! The forum posts you have seen may be a few years old and also refer to "investments" in the hood. Milwaukee has seen good appreciation over the last years, median home price is creeping up into the 190k range. A decade ago 2% was possible, now you are doing great if you find a full 1% in a quality area.
risk / reward is highly underplayed on BP when it comes to return on the rental props..

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0 Reply
Jordan Rhoads
OP
Investor · Hayden, ID · Member since 2020 · 29 posts · 36 votes
6y
@Jay Hinrichs, I was hoping to try the BRRRR strategy which doesn't really work in Spokane. And it'll be difficult (not impossible) to find deals in my price point. I may have to partner with someone. But you're right. Flips do work in Spokane. I suppose I could do at least one flip in Spokane before BRRRRing out of state. That would provide good experience and extra capital to BRRRR with out of state. I'll definitely look into that.
0 Reply
Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
6y
Originally posted by @Jordan Rhoads:
@Jay Hinrichs, I was hoping to try the BRRRR strategy which doesn't really work in Spokane. And it'll be difficult (not impossible) to find deals in my price point. I may have to partner with someone. But you're right. Flips do work in Spokane. I suppose I could do at least one flip in Spokane before BRRRRing out of state. That would provide good experience and extra capital to BRRRR with out of state. I'll definitely look into that.
OK good luck with what ever you decide..

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