Every time someone calls me and says: hey, I am an OOS investor and want to BRRRR in Milwaukee, I cringe. An investor friendly agent is supposed to be excited and send them a list of deals, right? Or tell the truth??

The great days of BRRRR are gone. 

The compression of inventory over the last 10 years has gradually restricted the discounts on the buying side. If inventory is low and competition is high, properties in poor condition will sell for almost as much as properties in great condition. For a good BRRRR you need at least half off ARV, that means buying a 200k home for 100k and fixing it for under 50, that is just not realistic anymore. It will sell for 185k as is to a first time home buyer with a handy family, who has no idea how much time and money it will eventually cost him to complete a full gut rehab.

I know, because I have been BRRRR-ing in Milwaukee since before Brandon Turner coined the term. Deals (by text book standards, full cash recycle) have gone from almost everywhere to complete unicorns. The days of "free-vesting" are gone, we are back to in-vesting, which requires capital.

People are still telling me it works, but when you look closer, they cheat themselves by patching a roof instead of replacing it, installing a new kitchen, but not the replacing plumbing, to save on expenses. Or you go into D neighborhoods and tell yourself it is a class C. 

Rehab and value add will always be a thing, I have 2 projects in the works now and rents will be higher after, but you can pretty much strike the last R in BRRRR: a full repeat with the same cash is not going to happen, especially if home prices start going sideways.