My wife and I have recently moved to the DFW area and we're doing our initial research on the area. Given the local market seems to have really low levels of inventory, along with rapidly rising property prices, we were wondering if anybody is successfully BRRRRing in this market? Are there below market deals to be had, or should we be looking at out of area instead?
We will be starting to get involved with local RE groups in the area, but just wanted to see if there were any BP investors with any advice?
@Martyn Sharp You are right about the market in Dallas, but there are lots of people using the BRRRR method successfully around there (a lot of them are our clients). The main thing that I think trips people up when looking at this is that there may not be the rehab component of it. Turnkey rentals may be hard to cash flow day one, but there's always properties in need of a good rehab.
Hey Martyn, my wife and I are looking to find a deal to BRRRR in the area for 2021 as well. As a realtor I can confirm that inventory is extremely low (1.1 months inventory as of Oct data, probably less in Nov). That's not necessarily a bad thing as most of the properties are going to relo's coming to the area and distressed properties will always come up however this market is definitely more active compared to a lot of other states. There are many MF properties in the DFW metroplex but as Jason mentioned they may be more turnkey and not necessarily BRRRR worthy. Hope that helps!
@Martyn Sharp As the two gentlemen before me have already said the BRRRR properties are indeed still out there. It is just a really competitive market. They are correct and I'm sure they have tons of great knowledge and expertise that they are more than willing to share with you.
Have a criteria. Don't waste time looking at deals that you don't want to pursue. If your criteria is BRRRR don't worry about looking at turnkey properties or the people buying turnkey. Thats not your competition, your competition is the people looking to BRRRR like you are and flippers that's pretty much it.(BTW people who BRRRR can pay more than flippers because they don't have to pay the 6% to sell afterwards!) You will waste a lot of your time looking at properties that you're not even interested in if you don't have a criteria so it's very important.
Another reason why prices are so high right now is that people are choosing to settle for deals that don't match their criteria or maybe don't cashflow. People are buying bad deals in hopes that the market keeps appreciating at the insane rate it is right now. The market wasn't like that before.
The real estate market has also never seen such low interest rates. Borrowing money is almost free right now. People are insane not to jump at the chance which is also the reason houses prices are sky rocketing.
BRRRR properties are out there. Maybe not at the discount they once were. Maybe not as many as there once was, but they are out there.
Great advice, thank you all. It is very much appreciated. I guess patience is the name of the game in this market. I'm going to look at other markets too I think, although it feels very intimidating to invest long-distance as our first step into real estate investing.
We are drawn to BRRRR's purely for the fact we can have a greater velocity for our money and better ROI. This may be ambitious in a very competitive market, but it feels like it's worth the wait.
We are aiming at probably the middle of 2021 to get our first deal. Between now and then we're just trying to absorb as much information as possible, analyze as many deals as possible and start to build relationships that could be beneficial when the time comes.