Anybody done a BRRRR in Atlanta, Houston or Baltimore?

Question

Hi Everyone, I'm a newbie about to start my real estate investment journey in the US. I'm an "accidental" landlord for a property in the UK but been spending some time to understand the best states/towns/cities to invest in the US. I'm focussing on single family and small-multi family units using BRRRR. I live in New Jersey (way too expensive to BRRRR here!) so now looking at Atlanta-GA, Baltimore-MD and Houston-TX. Anyone done flips, rentals or BRRRR in any of these cities? If so, any recommendations on best neighborhoods? Thanks in advance! :-)

Andrew Bang · Answer

Houston is great for using the BRRRR method. The two biggest issues are property taxes and flood insurance. Don't buy a rental in a flood area because its an additional cost for the insurance. Check the tax rates and assessed value for each home you look at. Its amazing how you can look at one home for 200k that's annual taxes are $1800, and another for 200k is $4800 annually. That said, still lots of good homes in Houston, Spring, The Woodlands, Katy, for around $200k that will rent for $2000/month with high appreciation still to come.

Seth Hochberg · Answer

If you add "Baltimore" to your list of alert keywords you'll see that Baltimore comes up a number of times for people choosing which market to invest in. It's very enticing with an extremely good price-to-rent ratio, and a large population of renters.

However, many people would recommend you stay away from Baltimore if you've never lived here before. Baltimore real estate investing goes deeper than the numbers on the paper and is very easy for out-of-state investors to get burned. It's extremely block-by-block and that combined with lack of knowledge about the area can be a recipe for disaster. Not saying you should avoid Baltimore, just saying it's risky. That being said, I BRRRR'd my first property in Baltimore and it went relatively well. Your mileage may vary.

Lauren Cutchen · Answer

@Bukki Fabiyi

True that different neighborhoods can affect tax rates in Texas. Definitely look out for flood zones. The Woodlands is a great area for flips. Highly desired, plenty of opportunity to flip. You'll see houses from $150/sq ft and flipped for $200+/sq ft.

Duane Alexander · Answer

The problem you'll find in Atlanta, and I imagine Houston as well, is that those are very competitive markets which means it will be hard to find brrrr'able (yes I just made that up) deals. You won't be able to simply look on zillow and find a house in atlanta you'll be able to BRRRR and cash flow on while getting anything close to 100% of your money back out on a refinance. Finding deals is tough in those markets unless you're prepared to go off market.

Wale Lawal · Answer

Welcome to BiggerPockets you are definitely in the right place.

Katy, Cypress, Spring, some parts of Houston, Conroe, Tomball, Pearland are great places to own rentals. These cities tend to command quality tenants, and they have great schools. I will suggest you do your research so that you can be making an educated decision.

I can chat if you like to get more insights on these cities.

I have rentals in Houston, Spring, and Conroe.

Good Luck!

Joe Norman · Answer

Baltimore is a great market for BRRRR, just proceed with caution. If the numbers look too good to be true then ask yourself why it is. Make sure you are very confident in your re-fi ARV and have someone with experience in Baltimore double check the comps you're using to make sure they're valid. Talk to Property Managers and make sure you have several options who work in the neighborhood(s) you are targeting. Same with contractors.

Good luck!

Bukki Fabiyi · Answer

Thanks Andrew, great advice re: flood zones and insurance and the impact on taxes which I guess is to be expected.

Bukki Fabiyi · Answer

Thanks, really useful

Bukki Fabiyi · Answer

This is really useful Seth, thank you! Great advice regarding not focusing on the numbers, definitely food for thought. Were you an out of state investor for Baltimore?

Anybody done a BRRRR in Atlanta, Houston or Baltimore?

Anybody done a BRRRR in Atlanta, Houston or Baltimore?

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