Best neighborhood for BRRR in Rochester

11 Replies

Hi All!

I'm new to real investing in the US, and I'm looking for a first rental property in Rochester. I've noticed quite a broad range of prices and general conditions in the properties from neighborhood to neighborhood, even on pretty short distances. From good ol' Canada, I find it a bit difficult to determine the potential increase of value of a property and the actual quality of a neighborhood (based on Google street view....).

I have a real estate agent working with me on that, but I thought I'd still go out here and ask for your inputs:
What area should I aim for in Rochester (or around) for a BRRR investment?

Thanks!

Rochester is a pretty unique place, and it isn't as easy as just picking an area for the BRRR method. There will typically be "value add" plays where you'll be doing some work. Common examples are exterior paint, interior paint, kitchens and baths but could also involve a full on gut. We have a lot of deferred stock sprinkled throughout the entire area, even in "nice" areas. Generally speaking the 19th Ward is probably worth considering if you're not already paying a premium for the location. Anywhere in the SE section of the city (if the numbers work) and most recently there has been a resurgence in Merchants. Obviously Browncroft if you could find something there too. Homestead Heights may be worth considering, but be careful!

Hope that helps!!  Happy Spring Y'all!!

Alright @Mark Updegraff , thanks for the input! I'll be looking at these areas.

Any areas worth looking at other that in Rochester itself?

@Simon Savard @Mark Updegraff is totally right. But there is no "good" neighborhood to BRRRR in, there are only good deals to BRRRR in. You have to buy right. Buy high quality assets in great neighborhoods and you'll do well. However, why not invest in your own back yard?

Outside of the city of Rochester the cost of acquisition goes up and the rents are the same or lower (depending on the suburb). They're often slower markets meaning vacancy can be a little higher as well. Some people buy in these markets, but primarily well established investors that are looking for quality assets and not as focused on cash flow. Yes, the BRRR method will work in these markets, however the cost of entry is typically a lot higher than the city. If you're working with limited capital, you could find yourself priced out of the market. If you've got plenty of capital it is an area worth considering.

@Matthew Drouin I'll be careful with that, thanks for the input! The reason I'm not investing in my market at the moment is @Mark Updegraff talked about in his last comment:
Vancouver: The prices are insanely high for rents that did not follow the inflation of the market.
Quebec: Hard to find good deals to BRRR with. The price of labor is almost 4x as expensive than the labor in your area!

@Simon Savard Yes, we have a lot of investors from Canada that purchase in Rochester. The only downside is getting financing as a non-us citizen. Canadians are either buying in all cash, using seller financing (typically in C class areas), or they've established a US corporation and seasoned it. Banks want you to build a bit of a track record and they start working with you slowly. One of our Canadians got approved for his first loan (3 property portfolio) and when we went back for more, they told us he needed to establish history with this loan prior to getting new loan... They also give a pretty cruddy LTV. The promise both the LTV will get better as well as the underwriting once he has proven himself with these.

As a fellow Canadian who just started looking in Rochester, there seems to be some deals to be had, I think you just have to be fast about it. 

As Mark mentionned, 19th ward seems to be desirable by alot of investors but depending on your budget you might find there is not that much volume and anything decent will go fast. 

I went to visit a few houses last weekend and you really have to go out there to get a feel of the area/houses. Sometimes pictures and reality are wayyyy off. I made an offer on a duplex that needed some work but lost it to someone who had no inspection contingency. 

Best of luck and feel free to reach out and connect! 

Alright, thanks Marc and Frederic!

Last I looked there were some ramblers in need of rehab in the "cheaper" parts of Brighton (zip code 14620 south of Elmwood and north of Westfall generally).  Prices have moved up since then but so apparently have rents.  

Last I looked there were some ramblers in need of rehab in the "cheaper" parts of Brighton (zip code 14620 south of Elmwood and north of Westfall generally).  Prices have moved up since then but so apparently have rents.  

If you’d like I could analyze a few for you. Are there any specific parameters you’d like? Price? COCRI? Bedrooms? Bathrooms? Type of home? Type of sale? 

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