Long Distance BRRRR Advice

BRRRR - Buy, Rehab, Rent, Refinance, Repeat
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Long Distance BRRRR Advice

Zach Wagner
Investor 路 CA 路 Member since 2020 路 14 posts 路 11 votes

Hey there everyone! I'm a newbie to real estate investing and I have been stuck in analysis paralysis. I've been trying to gain as much knowledge as I can before pulling the trigger on a property. I live in CA and I'm looking to invest out of state. I was wondering if anyone knows of good cities to BRRRR in this current market. I'm looking for properties in the B or C class neighborhoods. Primarily single family homes (all in purchase + rehab around $100k). My main focus is cash flow but I would love for the property to appreciate over time as well. Thanks in advance, any advice or insight helps.

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Andrew PostellPro Member
Lender 路 Fort Worth, TX 路 Member since 2016 路 8k+ posts 路 6k+ votes
4y

@Zach Wagner as an investor who had to also invest out of state before (I used to live in NYC) I would highly suggest investing in a city that you have a network in.  Meaning, while I live in NYC I invested in Jacksonville, Florida.  Not because Jacksonville, Florida had the best returns but because I already knew a few people who could get me plugged in with other vendors, etc.  When you invest out of state you may never even see your property.  That's an immense amount of trust to put into someone.  So if you know some people in "City X"....but "City Y" has better returns - stay with "City X".  In the long run you will make more money with people who will take care of your assets.  I hope that makes sense. 

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  • Nicholas L.Pro Member
    Flipper/Rehabber 路 Pittsburgh 路 Member since 2018 路 6k+ posts 路 5k+ votes
    4y

    @Quentin Jivery

    with small multi you have to be sure you're factoring in all expenses.  with a single family home you can typically shift more to all of the expenses to the renter.  with small multi, that is sometimes impossible.  some things to watch out for - 

    -utilities that aren't split

    -yard upkeep / groundskeeping / snow removal

    -additional wear and tear on shared facilities like entrances and laundry

    -parking

    if you're cash flowing $200, but you forgot to factor in utilities that cost you $200 a month... now you're breaking even.

    @Zach Wagner

    you said you want to buy "very distressed properties that I can buy all cash via private money lender"

    I am not saying this can't be done - just that it's going to be very challenging to do from thousands of miles away

    and very expensive... you can't borrow 100% of the purchase, 100% of the rehab, 100% of the closing costs, and 100% of the holding costs

    you need cash

    0Reply
  • Quentin Jivery
    Member since 2022 路 92 posts 路 11 votes
    4y
    Quote from @Nicholas L.:

    @Quentin Jivery

    with small multi you have to be sure you're factoring in all expenses.  with a single family home you can typically shift more to all of the expenses to the renter.  with small multi, that is sometimes impossible.  some things to watch out for - 

    -utilities that aren't split

    -yard upkeep / groundskeeping / snow removal

    -additional wear and tear on shared facilities like entrances and laundry

    -parking

    if you're cash flowing $200, but you forgot to factor in utilities that cost you $200 a month... now you're breaking even.

    @Zach Wagner

    you said you want to buy "very distressed properties that I can buy all cash via private money lender"

    I am not saying this can't be done - just that it's going to be very challenging to do from thousands of miles away

    and very expensive... you can't borrow 100% of the purchase, 100% of the rehab, 100% of the closing costs, and 100% of the holding costs

    you need cash


     How are you figuring out your numbers?

    Do you think single family is a good way to start? Maybe with mY own home?

    0Reply
  • Nicholas L.Pro Member
    Flipper/Rehabber 路 Pittsburgh 路 Member since 2018 路 6k+ posts 路 5k+ votes
    4y

    @Quentin Jivery

    I run actual numbers on actual properties.  I don't use rules or estimates.

    Yes, I like SF.  But is house hacking an option for you?

    0Reply
  • Quentin Jivery
    Member since 2022 路 92 posts 路 11 votes
    4y
    Quote from @Nicholas L.:

    @Quentin Jivery

    I run actual numbers on actual properties.  I don't use rules or estimates.

    Yes, I like SF.  But is house hacking an option for you?


    On my current residence? Or in general. If in general yes I鈥檇 love to. If on my current no. 
     

    0Reply
  • Andrew SyriosPro Member
    Moderator
    Residential Real Estate Investor 路 Kansas City, MO 路 Member since 2014 路 10k+ posts 路 5k+ votes
    4y
    Quote from @Zach Wagner:
    Quote from @Andrew Syrios:

    The best markets to BRRRR in are generally the midwest and southest (i.e. Oklahoma City, Kansas City, Des Moines, Birmingham, Memphis, etc.). The coasts are too expensive and the Rust Belt is pretty run down. But there are definitely still opportunities in the Rust Belt.

    Thank you, I have looked into a few of those. When you refer to the Rust Belt, what are you referring to? I have never heard that term.

    Places like Detroit, Cleveland, Cincinnati and the like. I would not include Pittsburgh, although it is known as an industrial city it's doing quite a bit better than those others. 
    Podcast Guest on Show #121
    1Reply
  • John WilliamsBusiness Member
    Property Manager 路 Clarksville, TN 路 Member since 2018 路 443 posts 路 210 votes
    4y
    Quote from @Zach Wagner:

    Hey there everyone! I'm a newbie to real estate investing and I have been stuck in analysis paralysis. I've been trying to gain as much knowledge as I can before pulling the trigger on a property. I live in CA and I'm looking to invest out of state. I was wondering if anyone knows of good cities to BRRRR in this current market. I'm looking for properties in the B or C class neighborhoods. Primarily single family homes (all in purchase + rehab around $100k). My main focus is cash flow but I would love for the property to appreciate over time as well. Thanks in advance, any advice or insight helps.


     Make sure you check out Clarksville, TN (where cash flow meets appreciation!) We've got a very attractive market, particularly for out of state investors

    [email protected]931-272-3065
    Rent My Home - Property Management4.8209 Reviews
    WebsiteView Page
    0Reply
  • Quentin Jivery
    Member since 2022 路 92 posts 路 11 votes
    4y
    Quote from @John Williams:
    Quote from @Zach Wagner:

    Hey there everyone! I'm a newbie to real estate investing and I have been stuck in analysis paralysis. I've been trying to gain as much knowledge as I can before pulling the trigger on a property. I live in CA and I'm looking to invest out of state. I was wondering if anyone knows of good cities to BRRRR in this current market. I'm looking for properties in the B or C class neighborhoods. Primarily single family homes (all in purchase + rehab around $100k). My main focus is cash flow but I would love for the property to appreciate over time as well. Thanks in advance, any advice or insight helps.


     Make sure you check out Clarksville, TN (where cash flow meets appreciation!) We've got a very attractive market, particularly for out of state investors

    I鈥檓 interested in Clarksville I have a friend who is a lender for ho lives close by, what can you tell me about it. 
    0Reply
  • John WilliamsBusiness Member
    Property Manager 路 Clarksville, TN 路 Member since 2018 路 443 posts 路 210 votes
    4y
    Quote from @Quentin Jivery:
    Quote from @John Williams:
    Quote from @Zach Wagner:

    Hey there everyone! I'm a newbie to real estate investing and I have been stuck in analysis paralysis. I've been trying to gain as much knowledge as I can before pulling the trigger on a property. I live in CA and I'm looking to invest out of state. I was wondering if anyone knows of good cities to BRRRR in this current market. I'm looking for properties in the B or C class neighborhoods. Primarily single family homes (all in purchase + rehab around $100k). My main focus is cash flow but I would love for the property to appreciate over time as well. Thanks in advance, any advice or insight helps.


     Make sure you check out Clarksville, TN (where cash flow meets appreciation!) We've got a very attractive market, particularly for out of state investors

    I鈥檓 interested in Clarksville I have a friend who is a lender for ho lives close by, what can you tell me about it. 

     I'll shoot you a message so we can set up a call!

    [email protected]931-272-3065
    Rent My Home - Property Management4.8209 Reviews
    WebsiteView Page
    0Reply
  • Susan Maneck
    Investor 路 Jackson, MS 路 Member since 2014 路 1k+ posts 路 769 votes
    4y

    There's a recent thread here about investing in Mississippi, someone posted about readily available brrrr/flips within your price range. Run a search and you will find it. Potential does exist there 

    Mississippi landlord here. Good cash flow is virtually guaranteed here, appreciation not so much. Our properties appreciated during the pandemic and rents rose, but before that the last wave of appreciation I've seen was in the aftermath of Hurricane Katrina (New Orleans doesn't fit in Jackson.) If someone is interested in Jackson properties I do have a couple of properties I'm going to be putting on the market soon if anyone is interested and wants to contact me privately. 


    3Reply
  • Delbert Standifer
    Rental Property Investor 路 Carson, CA 路 Member since 2019 路 185 posts 路 74 votes
    4y

    @Susan Maneck I鈥檓 interested 馃槉

    0Reply
  • Susan Maneck
    Investor 路 Jackson, MS 路 Member since 2014 路 1k+ posts 路 769 votes
    4y
    Quote from @Delbert Standifer:

    @Susan Maneck I鈥檓 interested 馃槉


     LOL. You are always interested. The question is when you will finances loosen up again? Next on my list to sale are the properties on 1339 and 1405 Wooddell properties. 

    0Reply
  • Delbert Standifer
    Rental Property Investor 路 Carson, CA 路 Member since 2019 路 185 posts 路 74 votes
    4y

    Skyes next year. I don鈥檛 like paying the flood insurance on Wooddell.

    0Reply
  • Miranda Micire
    Real Estate Agent 路 Pittsburgh, PA 路 Member since 2020 路 82 posts 路 55 votes
    4y

    Pittsburgh's a good option for this. 

    0Reply
  • Aj Parikh
    Rental Property Investor 路 Centreville, VA 路 Member since 2019 路 1k+ posts 路 799 votes
    4y

    Hi Zach, Welcome to Bigger Pockets!! The only challenge with BRRRR is the cash out refinance part is completely out of your control. With the interest rates fluctuating the way they are, it will be tough to calculate the numbers on how your cash out might look after your rehab is complete.

    If you are willing to start out of state investing, you can try working with a few turnkey companies to get started. I worked with a couple of them to get started and built my portfolio in Cleveland. Now, I am able to do BRRRR or buy and hold with small multi family. Feel free to connect and we can chat more since I just completed a long distance BRRRR.

    2Reply
  • Joe HammelBusiness Member
    Real Estate Agent 路 Metro Detroit, MI 路 Member since 2018 路 614 posts 路 666 votes
    4y

    @Zach Wagner

    Metro Detroit

    (my rental portfolio is here)

    Purchase: $80k-$130k

    Rent: $1200-$1500

    ROI: 10-14%

    Cash flow: $250-$350/door

    Appreciation: Double digit (for past 10 years, will gladly send data)

    Location: C+, B- (suburbs and certain markets)

    We have over a dozen Fortune 500 companies just in Metro Detroit with huge Healthcare, Auto, mortgage, Amazon fulfillment, and more jobs.

    The bad reputation comes from OOS investors wanting $20k D market properties. We don鈥檛 buy those lol.

    [email protected]248-422-1685
    FIRE Realty Team - Keller Williams5379 Reviews
    WebsiteView Page
    1Reply
  • Nicholas L.Pro Member
    Flipper/Rehabber 路 Pittsburgh 路 Member since 2018 路 6k+ posts 路 5k+ votes
    4y

    @Joe Hammel

    just curious, how much are you spending on the rehabs and how much are you cashing out?

    0Reply
  • Joe HammelBusiness Member
    Real Estate Agent 路 Metro Detroit, MI 路 Member since 2018 路 614 posts 路 666 votes
    4y
    Quote from @Nicholas L.:

    @Joe Hammel

    just curious, how much are you spending on the rehabs and how much are you cashing out?

    It depends鈥ust did one a deal that sat on the mls for 70 days and I bought it cash for $77k and didn鈥檛 do any repairs and my appraisal value was $102k so it was a near perfect brrrr with no work.

    otherwise, a traditional brrrr is $15-$25k+ rehab. 

    My biggest advice is don鈥檛 get stuck on a perfect brrrr. Find a property with sweat equity and follow the brrrr process. If you do this multiple times your ROI will be very high but it鈥檚 also a realistic, repeatable approach. 
    [email protected]248-422-1685
    FIRE Realty Team - Keller Williams5379 Reviews
    WebsiteView Page
    0Reply
  • Nicholas L.Pro Member
    Flipper/Rehabber 路 Pittsburgh 路 Member since 2018 路 6k+ posts 路 5k+ votes
    4y

    @Joe Hammel

    agree, in my view if you end up with a good amount of created value it's a base hit and that's fine.  you can't control the appraisal anyway.  i finished my first in PA earlier this year and am looking for my second.  'left money in the deal' but have a strong, rehabbed rental.

    0Reply
  • Delbert Standifer
    Rental Property Investor 路 Carson, CA 路 Member since 2019 路 185 posts 路 74 votes
    4y
    Quote from @Nicholas L.:

    @Joe Hammel

    agree, in my view if you end up with a good amount of created value it's a base hit and that's fine.  you can't control the appraisal anyway.  i finished my first in PA earlier this year and am looking for my second.  'left money in the deal' but have a strong, rehabbed rental.

    0Reply
  • Delbert Standifer
    Rental Property Investor 路 Carson, CA 路 Member since 2019 路 185 posts 路 74 votes
    4y

    I鈥檓 curious as to why it鈥檚 so many properties available in Pittsburg. I鈥檇 buy there but trying to understand the market. If any investor friendly agents are available please reach out to me.

    0Reply
  • Joe HammelBusiness Member
    Real Estate Agent 路 Metro Detroit, MI 路 Member since 2018 路 614 posts 路 666 votes
    4y
    Quote from @Nicholas L.:

    @Joe Hammel

    agree, in my view if you end up with a good amount of created value it's a base hit and that's fine.  you can't control the appraisal anyway.  i finished my first in PA earlier this year and am looking for my second.  'left money in the deal' but have a strong, rehabbed rental.

    Yep that鈥檚 perfect 
    [email protected]248-422-1685
    FIRE Realty Team - Keller Williams5379 Reviews
    WebsiteView Page
    0Reply
  • Zach Wagner
    OP
    Investor 路 CA 路 Member since 2020 路 14 posts 路 11 votes
    4y
    Quote from @Nicholas L.:

    @Quentin Jivery

    with small multi you have to be sure you're factoring in all expenses.  with a single family home you can typically shift more to all of the expenses to the renter.  with small multi, that is sometimes impossible.  some things to watch out for - 

    -utilities that aren't split

    -yard upkeep / groundskeeping / snow removal

    -additional wear and tear on shared facilities like entrances and laundry

    -parking

    if you're cash flowing $200, but you forgot to factor in utilities that cost you $200 a month... now you're breaking even.

    @Zach Wagner

    you said you want to buy "very distressed properties that I can buy all cash via private money lender"

    I am not saying this can't be done - just that it's going to be very challenging to do from thousands of miles away

    and very expensive... you can't borrow 100% of the purchase, 100% of the rehab, 100% of the closing costs, and 100% of the holding costs

    you need cash


     Yes it will be challenging from far away. But I'm up for a challenge and I believe its worth it. Actually I believe I can borrow 100% of all associated costs. Thats what a private money lender is for. They give me the capital(cash) to fund the deal and then I pay them back plus interest after the refinance. 

    0Reply
  • Zach Wagner
    OP
    Investor 路 CA 路 Member since 2020 路 14 posts 路 11 votes
    4y
    Quote from @John Williams:
    Quote from @Zach Wagner:

    Hey there everyone! I'm a newbie to real estate investing and I have been stuck in analysis paralysis. I've been trying to gain as much knowledge as I can before pulling the trigger on a property. I live in CA and I'm looking to invest out of state. I was wondering if anyone knows of good cities to BRRRR in this current market. I'm looking for properties in the B or C class neighborhoods. Primarily single family homes (all in purchase + rehab around $100k). My main focus is cash flow but I would love for the property to appreciate over time as well. Thanks in advance, any advice or insight helps.


     Make sure you check out Clarksville, TN (where cash flow meets appreciation!) We've got a very attractive market, particularly for out of state investors


     Thank you, I will give it a look! If it fits my needs I will be coming to you for some property management questions and maybe we can team up.

    0Reply
  • Zach Wagner
    OP
    Investor 路 CA 路 Member since 2020 路 14 posts 路 11 votes
    4y
    Quote from @Quentin Jivery:
    Quote from @Zach Wagner:
    Quote from @Quentin Jivery:
    Quote from @Zach Wagner:
    Quote from @Quentin Jivery:
    Quote from @Zach Wagner:

    Hey there everyone! I'm a newbie to real estate investing and I have been stuck in analysis paralysis. I've been trying to gain as much knowledge as I can before pulling the trigger on a property. I live in CA and I'm looking to invest out of state. I was wondering if anyone knows of good cities to BRRRR in this current market. I'm looking for properties in the B or C class neighborhoods. Primarily single family homes (all in purchase + rehab around $100k). My main focus is cash flow but I would love for the property to appreciate over time as well. Thanks in advance, any advice or insight helps.


     Any luck on BRRRS recently?


     Im just starting on my investment journey. So I have yet to get a property under contract. Im doing as much research as I can because investing out of state can be risky. However, I'm willing to make the sacrifices necessary for a positive outcome.   

    Where are you looking at properties? On the MLS or somewhere else? Are you calling agents and asking them, I鈥檓 only asking because I鈥檓 trying to figure out where to point my energy as far as analyzing deals and finding them. 

    I don't have access to the MLS as far as I know. I believe you have to be an agent to do that. I search on Zillow, Realtor, etc. If I find one in a market that meets my criteria I take and analyze it myself with rough numbers, using one of the calculators provided here. I'm in the process of searching for a rockstar investor friendly agent that can use their knowledge to help narrow my results and be the start of my team.

    Where are you looking for that realtor? Are you looking for a single family house hack? Or a single family rent and then refi down the road?

    Thanks for taking all my questions! 

    Honestly I'm looking for realtors in areas that meet my criteria. That was the point of this post, to find those areas that work for the BRRRR method in my price range. When I narrow it down to a few markets I want, then I will lock down a good investor friendly agent in that market to help me find good deals. And to answer your second question I'm looking for single family that I can rent and the refinance down the road. Essentially the BRRRR method.

    0Reply
  • Delbert Standifer
    Rental Property Investor 路 Carson, CA 路 Member since 2019 路 185 posts 路 74 votes
    4y

    @Miranda Micire I鈥檓 interested in Pittsburgh

    0Reply
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