In this hot market, how to pull capital back to repeat BRRRR

Fort Worth, Texas
BRRRR - Buy, Rehab, Rent, Refinance, Repeat
4yFollow

In this hot market, how to pull capital back to repeat BRRRR

Jason Sung
Investor · Dallas, TX · Member since 2019 · 91 posts · 30 votes

Hi, 

I am a new investor in Fort Worth TX. I learned about BRRRR and would like to try it. However, there seems no property that I can buy below market value to make the BRRRR to work.

I don't want to buy a turn key property and end up leaving huge amount of capital in the property. If I buy turn key property, I wont have much capital left for next investment. Also, I have not seen any property that would cash flow with turn key in DFW. I have been listening BP podcast for the past one year and it seems even the experienced investors are struggling to find good deals in this market. I only lived in DFW area in US and prefer to invest in DFW since I am more familiar with this area than others. 

I would like to keep investing by pulling my capital back after closing next deal (not sure what the next deal is going to be). I would appreciate any advice. 

3Reply
14 views

Most Popular Reply

Kyle MccawBusiness Member
Property Manager · Keller, TX · Member since 2011 · 1k+ posts · 1k+ votes
4y


@Jason Sung you can find properties that work BRRRR model. You need to focus on marketing to distressed owners or/and work with wholesalers. I have purchased 3 single family homes this year that cost me zero out of pocket. I have many fiends and clients that have bought many many rentals with an infinite return.

McCaw Property Management4.4905 Reviews
WebsiteView Page
3Reply
See this reply in the discussion

11 Replies

Jump to latestLatest
  • Issac San Miguel
    Lender · Austin Texas · Member since 2022 · 319 posts · 156 votes
    4y

    Instead of BRRRR maybe a fix and flip could be a good use of your capital.

    I have a few clients who are doing well with BRRRR in tertiary markets around DFW. Denton, Burleson, Wylie are a few places that I have funded a project recently.

    Reach out if you have any questions or if I can help. 

    2Reply
  • Nathan Grabau
    Realtor · Longmont, CO · Member since 2021 · 577 posts · 631 votes
    4y

    The way I would think about this is there has to be some value add that you create in the deal to not have to put your capital into it. BRRRR is less about trying to find below market value deals and more add value to a deal and the "profit" you would make as a flipper, keep it in the deal as the equity. Sadly, there is not yet a way to (instantly) Buy, rent, refinance, repeat.

    I am with you though on the wanting to go fast, I went from 1 to 12 doors in 3.5 months and now have been stalled, mostly due to capital restraints, for the last 6 months. 

    1Reply
  • Kyle MccawBusiness Member
    Property Manager · Keller, TX · Member since 2011 · 1k+ posts · 1k+ votes
    4y


    @Jason Sung you can find properties that work BRRRR model. You need to focus on marketing to distressed owners or/and work with wholesalers. I have purchased 3 single family homes this year that cost me zero out of pocket. I have many fiends and clients that have bought many many rentals with an infinite return.

    McCaw Property Management4.4905 Reviews
    WebsiteView Page
    3Reply
  • Alicia MarksPro Member
    Fort Worth, TX · Member since 2020 · 1k+ posts · 2k+ votes
    4y

    I am doing infinite return BRRRs in DFW, but I'm very strategic about what I purchase. You also have to be careful about costs because with supplies and labor costs increasing significantly. I'm an open book if you have any questions. 

    [email protected]Podcast Guest on Show #204
    3Reply
  • Jerid Watson
    Real Estate Agent · Dallas, TX · Member since 2022 · 4 posts · 2 votes
    4y

    I would suggest just as Kyle Mccaw said, try and find off market opportunities that fit your investor goals. Try and be consistent with contractors as well to establish trust and rapport.

    2Reply
  • Jaron WallingPro Member
    Rental Property Investor · Indianapolis, IN · Member since 2018 · 4k+ posts · 4k+ votes
    4y

    The fact is it's really hard to BRRRR anything right now. In last few years everything we see doesn't work with that strategy. Rent levels haven't kept up with prices. I'm either living in it as a primary or flipping. I just ran some numbers for a property we're interest in buying. It's a distressed property, bank owned, and good location. As a rental it would negative cash-flow about $125-150 per month. I threw BRRRR out the window last year, and I'm in a cash-flow market.

    Better chance to find something that works off market but don't get too excited. Sellers have all the leverage. 

    0Reply
  • Andrew Garcia
    Lender · Charlotte, NC · Member since 2022 · 739 posts · 410 votes
    4y

    Hi @Jason Sung, connect with local wholesalers to find off-market opportunities. 

    The list price is not always the sales price. You can also look at homes that have been on the market for 3+ months and make offers on them that would make the numbers work.

    Hope this helps! Let me know if I can be of any assistance.

    0Reply
  • Mike Dymski
    Investor · Greenville, SC · Member since 2016 · 5k+ posts · 13k+ votes
    4y

    We should change the name "real estate investing" to "real estate sourcing". The "RRRR" of BRRRR is irrelevant without the right "B"...and the "B" takes extensive networking, marketing, and time. We don't "buy" real estate, we "source" it...and deal sourcing, rehabbing, and refinancing is an active, time-consuming endeavor. You have to enjoy the hunt; otherwise, it's likely not worth it.

    0Reply
  • Fiza Ah
    Investor · Member since 2020 · 80 posts · 71 votes
    4y

    Curious to see how others are doing it too. Have a lot of money tied up in properties that may not make sense to Refinance. Do we expect rates to stabilize (not increase so dramatically) in the next 12 months if the recession gets more pronounced?

    0Reply
  • Michael PorchePro Member
    Rental Property Investor · Boise, ID · Member since 2017 · 220 posts · 101 votes
    4y

    Hi @Jason Sung! yes, this is a hot market... however it won't be a hot market forever. In fact it may be turning pretty quickly here with what's going on with the economy. Now with that being said, you have probably heard of the term, "You don't find good deals, you make good deals" in the bigger pockets podcast and more. I think this is very true. I would advise you to educate yourself on what it looks like to "make" a good deal. every property is different and requires a different strategy in order to make a deal. Essentially you want to be the guy who brings a tool bag(brrrr, flip, wholesale, Airbnb, subto, etc) to a construction site rather than just a hammer(brrrr). This will help you make good deals more often... Have you ever thought of increasing your chances of getting good deals by going out of state?

    1Reply
  • Joshua JanusBusiness Member
    Realtor · Cleveland, OH · Member since 2021 · 1k+ posts · 1k+ votes
    4y
    Quote from @Jason Sung:

    Hi, 

    I am a new investor in Fort Worth TX. I learned about BRRRR and would like to try it. However, there seems no property that I can buy below market value to make the BRRRR to work.

    I don't want to buy a turn key property and end up leaving huge amount of capital in the property. If I buy turn key property, I wont have much capital left for next investment. Also, I have not seen any property that would cash flow with turn key in DFW. I have been listening BP podcast for the past one year and it seems even the experienced investors are struggling to find good deals in this market. I only lived in DFW area in US and prefer to invest in DFW since I am more familiar with this area than others. 

    I would like to keep investing by pulling my capital back after closing next deal (not sure what the next deal is going to be). I would appreciate any advice. 



    In this market, it's all about having multiple sources to find a deal. The BRRRR strategy is very competitive and when deals pop up you need to find investors, agents, wholesalers etc. who know about it.

    [email protected]614-502-5316Podcast Guest on Show From DoorDasher to $1.5 MILLION in Real Estate (All at 22 Years Old!)
    0Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free