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!!!
Lender · Omaha, NE · Member since 2008 · 1k+ posts · 1k+ votes
6y
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.
Residential Real Estate Investor · Kansas City, MO · Member since 2014 · 10k+ posts · 5k+ votes
6y
Markets in that price range are going to be all in the Midwest and South. (Maybe a few in the Rust Belt, but only really bad areas there I would think.) Of course, you could get a bank loan and use the HELOC as a downpayment, but you need to be careful the property still cash flows with that much debt attached to it (or allocated to in the case of the HELOC).
@Jordan Rhoads BRRRR works in literally any market on the planet, you just have to find a good deal, add value be all in for 75% of the ARV. If you can't find a BRRRR deal in your market you're probably not looking at enough deals or making enough offers. People BRRRR with 2 cap rate properties in NYC. Cash flow on the other hand is a different story, but if you can create equity and have any cash flow that's a win in my book. But just remember as well, even on a more expensive property, if you create 50k of equity in a more expensive property, that equity can eventually be 1031d into multifamily down the road that will give you a better return on that equity
I couldn't agree more. And I would also like to add, that once you dig deep into a specific market (zipcode even) and connect with people who have boots on the ground, you can find deals that will qualify for BRRRR in almost any market. Especially today when cash buyers with fast closing are even more attractive to some sellers.
You still need to search for those market characteristics in my opinion:
1. The market is hot enough for you to be able to find a tenant quickly and move to the next deal.
2. There are a lot of likewise properties that might be able to qualify for a future BRRRR deal.
3. In general, the market in affiliating in a way that will support equity growth over time and allow you to refinance and cash out more equity for future deals after your system is in place.
Rental Property Investor · Chicago, IL · Member since 2019 · 203 posts · 119 votes
6y
@Jordan Rhoads I am sure there are some great deals in Idaho. While I don't know the market, I always like local investing. My biggest problem investments were out of state.
Hi, newly here...👋 when you say 1% deal, are you talking about 1% rent to purchase price?
Correct. Ten years ago I used to buy single family homes for 80k in a decent area, spend 40k on a complete rehab and rent them for about $1,400. Now its more like 120k purchase and 50k rehab for $1500 in rent. We have seen property prices inch up 5-8% every year, and even now with CV they still go up
Rental Property Investor · La Verne, CA · Member since 2020 · 5 posts · 3 votes
6y
Independence is pretty competitive for investors and it would be tough to find a property at your price point without going to the KC adjacent neighborhoods which are pretty rough I’m looking at Pocatello ID myself. Have you considered that area?
Investor · Hayden, ID · Member since 2020 · 29 posts · 36 votes
6y
@Susan Howard, Pocatello is about an 8 hour drive from me so it'd be a pretty similar experience as investing anywhere else in the US. Also it's more expensive than Independence. I'm actually considering Dayton, OH now as well. The prices are much lower than KC and it seems that the numbers would be more forgiving. I wouldn't get much appreciation but for my first deal I mainly want experience and I feel that's a good place to start. I can always branch out to other markets once I get confidence.
Specialist · Dayton, OH · Member since 2014 · 352 posts · 265 votes
6y
As many have mentioned here …. I believe Dayton OH is the best place in the world to invest. I live here locally NOW, but am not originally from OH. I moved to Dayton, just for the summer - in 2003! I have never left simply because of the opportunities available here in RE. I have been doing very well personally as an investor, and have helped a few others get started here as well. If you want to chat more let me know how I can help
Ozzy
Rental Property Investor · NY · Member since 2018 · 571 posts · 332 votes
6y
@Bill Goodland BRRRR = Buy, Rehab, Rent, Refi - yes you can technically do it. But negative cashflow means everytime you buy a property you get less and less capital because you are paying out of pocket every month to cover the bill. the point of BRRRR is to recycle your capital so you can build a portfolio. You are depleting your capital in this case. I'll give you an example. I'm looking at a STUDIO in Manhattan. It's asking price is $700k, and and estimated monthly rent is $3300. Your PITI is over $5800, not to mention the capital expenditures and repairs, vacancy, property management, utilities etc so you'll probably bleed about $4000 a month on average. You refied all the cash you put in at 75% LTV, which is $525k you keep that property for a year and you've lost 10% of your capital that you refied. How does that work well as a BRRRR? I can bet you REITS don't BRRRR in NY. They flip in those areas and roll the capitals into the next project. Like I said, it defeats the purpose of BRRRR because you are losing your capital even if you successfully refinance. Way better off to flip than to BRRRR in those markets.
Riverside, CA · Member since 2020 · 24 posts · 11 votes
6y
@Tony Rice
Ya, I’m looking to connect with as many people as possible. I wanna get the ball rolling on my portfolio and the only way I know how to do it is to jump in with both feet.
Wholesaler · Fayetteville, NC · Member since 2017 · 121 posts · 145 votes
6y
@Jimmy Lin Core 4 is something I pulled from David Greene's books: Agent, Contractor, Lender, Property Manager. If you find one that's a rock star I'm sure they'll be able to hook you up with the remaining three.