Contractor · Los Angeles, CA · Member since 2015 · 887 posts · 323 votes
Hello BP! I'm looking to get into multi-families (2-4 units) and would love to use the BRRRR (Buy Rehab Rent Refinance Repeat) method in order to finance future acquisitions. I'm looking into the Milwaukee, WI, Cleveland, OH, Southern Suburbs of Chicago and Memphis, TN and possibly Detroit. Are any of these areas good for this strategy? Would love to hear from those that are doing it in those markets or can provide some expertise. Thank you BP!
Real Estate Entrepreneur · Mid West, East Coast · Member since 2015 · 3k+ posts · 1k+ votes
9y
@Account Closed cash flow is what brings me there and biggest challenge are the late rents. Presently I don't have anyone behind in rent but then again many of my tenants recently received there income tax checks. November - January are tough months to get rent on time. Not sure if it's the holidays that do it, but I'm working with a tenant class that would prefer to buy a large screen t.v. before property budgeting and paying all of their bills on time. Go figure.
Broadview Heights, OH · Member since 2013 · 95 posts · 38 votes
9y
I can't speak to any other area, they may have something better to offer. I am in Cleveland, wholesale and fix flip, so not your strategy. Return on investment for some c and b areas are still reasonable but just like the rest of the country, prices are on the rise. Might help with the refi tho.
Rental Property Investor · Chicago, IL · Member since 2016 · 318 posts · 307 votes
9y
@Account Closed BRRRR can be used any where. its just 1 ext strategy.
The question is do you want cash flow or appreciation? That will help you drill down to a preferred area. I don't know much about Memphis but I doubt it has more future value upside than Chicagoland.
Then you have to ask yourself what type of tenant do you want to attract? Are you confident in the "hoods" of Milwaukee or Cleveland or anywhere else. Or do you prefer an upscale client base. Similar to question 1, will vary based on CF vs. Appreciation areas.
I am in Chicago land if you need more advice about my area. Happy to help
Rental Property Investor · Chicago, IL · Member since 2016 · 318 posts · 307 votes
9y
@Account Closed that is a good strategy for long term cash flow and equity. Why Blue Island? Have you ever been to the city or have boots on the ground?
Equity Raiser and Turnkey Provider · Cleveland, OH · Member since 2016 · 4k+ posts · 1k+ votes
9y
Originally posted by @Account Closed:
Hello BP! I'm looking to get into multi-families (2-4 units) and would love to use the BRRRR (Buy Rehab Rent Refinance Repeat) method in order to finance future acquisitions. I'm looking into the Milwaukee, WI, Cleveland, OH, Southern Suburbs of Chicago and Memphis, TN and possibly Detroit. Are any of these areas good for this strategy? Would love to hear from those that are doing it in those markets or can provide some expertise. Thank you BP!
Are you only looking at MFRs? They can be difficult to predict the ROIs and also as an owner you will have some extra expenses (grass, snow, water, etc.)
Contractor · Los Angeles, CA · Member since 2015 · 887 posts · 323 votes
9y
@Shawn Ackerman I am looking to narrow it down 1-3 markets. To be realistic my plan is to visit Illinois and Milwaukee in the summer. I hope to be able to drive to the Cleveland area as well. I am looking to least make a 10% return for my cash. I am also looking to refinance the properties in order to acquire more.
Real Estate Entrepreneur · Mid West, East Coast · Member since 2015 · 3k+ posts · 1k+ votes
9y
@Account Closed If you decide on Milwaukee let me know. What you mentioned as your strategy is precisely what I've been doing in the market. From one out of state investor to another, I can tell you that it works. With respect to your anticipated returns, 10% is realistic depending on how high/low end you are looking. Many times deals look nice on paper at 18-20% but when you factor in repairs that come up and other factors your returns will likely be in the 12-14% ballpark. This is true at least in my area of investment. Your doing some good ground work now. Keep it up and you will be fine when your ready to pull the trigger.
Real Estate Entrepreneur · Mid West, East Coast · Member since 2015 · 3k+ posts · 1k+ votes
9y
@Account Closed I invest in D/C class neighborhoods. I go where many others won't to be honest with you. I have property in 53206, 53208, 53216, 53210.
Real Estate Entrepreneur · Mid West, East Coast · Member since 2015 · 3k+ posts · 1k+ votes
9y
@Account Closed cash flow is what brings me there and biggest challenge are the late rents. Presently I don't have anyone behind in rent but then again many of my tenants recently received there income tax checks. November - January are tough months to get rent on time. Not sure if it's the holidays that do it, but I'm working with a tenant class that would prefer to buy a large screen t.v. before property budgeting and paying all of their bills on time. Go figure.
Contractor · Los Angeles, CA · Member since 2015 · 887 posts · 323 votes
9y
@Shawn Ackerman I see that for a lot of business those months are the toughest. Unfortunately that's the way it goes. Have you thought about investing in any better neighborhoods in the near or distant future?
Contractor · Los Angeles, CA · Member since 2015 · 887 posts · 323 votes
9y
@Ibn Abney Blue Island because I have a relative out there who has done pretty well for themself. Also due to the capital I have it is more attainable to start out that way as opposed to California. I know it can be done out here and in no way am I looking for an 'easy way' because all of it takes work. Like I stated it is more attainable for me.
Real Estate Entrepreneur · Mid West, East Coast · Member since 2015 · 3k+ posts · 1k+ votes
9y
@Account Closed At the present, my niche is working well. Returns are great and the cost to carry(if a unit goes vacant) is less than what I spend per month on Starbucks coffee. When I'm done with this market, I'm headed over to Larger commercial units 10 - 20 Units in C/B neighborhoods.
Real Estate Broker · 3412 S. Harlem Avenue Riverside, IL 60546 · Member since 2015 · 6k+ posts · 5k+ votes
9y
Are you looking to live in these, or just buy them as investments? In most of the Chicago market it is much more challenging to buy the good deals because of the competition. The best opportunities I think are for owner occupants.
Real Estate Entrepreneur · Mid West, East Coast · Member since 2015 · 3k+ posts · 1k+ votes
9y
@Account Closed I haven't decided how I'd like to tackle the upcoming commercial acquisitions. I have private money available here in NY so I think I'll be o.k. there. I have my entire property management crew already in place as well so I'm good there too. Who knows, I may want to syndicate a deal or two on the commercial side. Not really sure yet. That's the great thing about real estate, there are so many avenues to travel... I have no interest in developing, not my thing.
Contractor · Los Angeles, CA · Member since 2015 · 887 posts · 323 votes
9y
@John Warren I do not plan to live in any of them. I live in Los Angeles and don't have plans to move anytime soon so they would be investments.
@Shawn Ackerman learning all of those avenues can be a bit overwhelming, but you just have to stick with it till it makes sense. Thanks for all your help.
Property Manager · Cleveland, OH · Member since 2016 · 260 posts · 162 votes
9y
@Account Closed I may be slightly biased but keep Cleveland on that short list. SFR in our suburbs will work well with the refi (and repeat) step at the end. They should also meet your expected returns of 10%. Parma would be the top of my list for stability and the possibility of appreciation.