Who is having success on their BRRRR portfolio in DC?

[Tyler Welch]

I'm looking to hear from investors in the DMV on how their BRRRR properties are doing in this current market? Any tricks and tips! Lets talk!

[Russell Brazil]

Quote from @Tyler Welch:

I'm looking to hear from investors in the DMV on how their BRR properties are doing in this current market? Any tricks and tips! Lets talk!

They major determinant to success and biggest tip to BRRRR in DC is having capital. A typical BRRRR here will have a $550-650k acquisition price with a $150-250k renovation cost.

[Tyler Welch]

Quote from @Russell Brazil:

Quote from @Tyler Welch:

I'm looking to hear from investors in the DMV on how their BRR properties are doing in this current market? Any tricks and tips! Lets talk!

They major determinant to success and biggest tip to BRRRR in DC is having capital. A typical BRRRR here will have a $550-650k acquisition price with a $150-250k renovation cost.

 I definitely agree. A lot of people seem to be moving toward MD. What are your thoughts/feelings on that? Typically property value around 290-350k with 30-40k reno. 

[Russell Brazil]

Quote from @Tyler Welch:

Quote from @Russell Brazil:

Quote from @Tyler Welch:

I'm looking to hear from investors in the DMV on how their BRR properties are doing in this current market? Any tricks and tips! Lets talk!

They major determinant to success and biggest tip to BRRRR in DC is having capital. A typical BRRRR here will have a $550-650k acquisition price with a $150-250k renovation cost.

 I definitely agree. A lot of people seem to be moving toward MD. What are your thoughts/feelings on that? Typically property value around 290-350k with 30-40k reno. 

 $30-40k reno is incredibly low rehab budget. It's pretty unrealistic budget for a property that can be rehabbed and force value into.

We have an off market property in PG county now as an example thats $350k, but it needs a $150k renovation budget. The cheapest renovation budgets Im running into for a light rehab are going to be $85kish.

[Cassidy Burns]

I think the BRRRR strategy is best used in the primary residence space.

Buy a single family house with 3-5% down (conventional or FHA) that needs some cosmetic improvements but already has a 4 bedroom/ 2 bathroom layout.

Paint, new kitchen, bathroom updates, and add a 1/2 bath on the main level. 

 (~$75,000)

LIve there for 1-3 years, open up a LOC on the property, and then move out.

I don't have an acronym for this yet, but it's very similar to BRRRR but instead a longer time horizon and utilizing a HELOC instead of Refinance.

[Tyler Welch]

Quote from @Cassidy Burns:

I think the BRRRR strategy is best used in the primary residence space.

Buy a single family house with 3-5% down (conventional or FHA) that needs some cosmetic improvements but already has a 4 bedroom/ 2 bathroom layout.

Paint, new kitchen, bathroom updates, and add a 1/2 bath on the main level. 

 (~$75,000)

LIve there for 1-3 years, open up a LOC on the property, and then move out.

I don't have an acronym for this yet, but it's very similar to BRRRR but instead a longer time horizon and utilizing a HELOC instead of Refinance.

I like that structure a lot @Cassidy Burns

@Russell Brazil

@Russell Brazil are you getting any movement with condos in the DC area? I have seen a lot moving hands with rentals. Turn Key essentially.

MD we are having some decent luck, I found a 305k in odenton that needs updating but not too much. 

[Jack Seiden]

Quote from @Tyler Welch:

I'm looking to hear from investors in the DMV on how their BRRRR properties are doing in this current market? Any tricks and tips! Lets talk!

BRRRR in D.C. region is on life support if not dead , the suburbs the cost of reno plus purchase is usually more than buying turn key. D.C. has some value add but you end up leaving a ton of cash in the deal (because refinancing is only 75% ltv vs up to 96.5% owner occupied usually more cash in the deal than turn key.) and finally the areas in D.C. where brrring makes sense after refi you cash flow would be sharply negative often -1k-$1500, it's the reason I never keep my flips as rentals. Want to make money in D.C. buy something in a good area that breaks even on the rent or even eat a modest amount (usually-$500 or so is justifiable for the principal pay down) and wait.

[Tyler Welch]

Quote from @Jack Seiden:

Quote from @Tyler Welch:

I'm looking to hear from investors in the DMV on how their BRRRR properties are doing in this current market? Any tricks and tips! Lets talk!

BRRRR in D.C. region is on life support if not dead , the suburbs the cost of reno plus purchase is usually more than buying turn key. D.C. has some value add but you end up leaving a ton of cash in the deal (because refinancing is only 75% ltv vs up to 96.5% owner occupied usually more cash in the deal than turn key.) and finally the areas in D.C. where brrring makes sense after refi you cash flow would be sharply negative often -1k-$1500, it's the reason I never keep my flips as rentals. Want to make money in D.C. buy something in a good area that breaks even on the rent or even eat a modest amount (usually-$500 or so is justifiable for the principal pay down) and wait.

 Oh I hear that. But I dont think its on life support. I think it'll pull through, but hey maybe im just an optimist. I love DC character, and areas even like SE we are seeing a lot more pull for larger higher end apartments and condos being built. Dont get me wrong, a city is a city. But there is always constant movement in and out so I dont think itll ever die completely. 

I feel a lot of those making the BRRR moves often forget about the large market of travel nurses needing housing near hospitals. Especially Childrens Hospital. It's as simple as opening up their rentals for pets which makes the travel nurses lives way easier.

My fiancee often finds it difficult for her and her friend to find housing in cities that offer no room for pets. But its a huge market for what they are getting paid right now $$$$$

Just my 2 cents on looking at from personal experience. I know those hospitals are hurting on staff #'s so they outsource A LOT.

We have a Fix n Flip right now for 479.9k in Petworth, reno is prob at a higher range to get most bang for buck but reno comps go for 800-1.1mil depending on how beautiful you want to make it. The pending contract two as is comps are 460 and about 540k (off top of my head), only on market for 4 and 7 days. So I think yes, the fix and flip for the higher amount is better bang for buck right now. 

[Jack Seiden]

Quote from @Tyler Welch:

Quote from @Jack Seiden:

Quote from @Tyler Welch:

I'm looking to hear from investors in the DMV on how their BRRRR properties are doing in this current market? Any tricks and tips! Lets talk!

BRRRR in D.C. region is on life support if not dead , the suburbs the cost of reno plus purchase is usually more than buying turn key. D.C. has some value add but you end up leaving a ton of cash in the deal (because refinancing is only 75% ltv vs up to 96.5% owner occupied usually more cash in the deal than turn key.) and finally the areas in D.C. where brrring makes sense after refi you cash flow would be sharply negative often -1k-$1500, it's the reason I never keep my flips as rentals. Want to make money in D.C. buy something in a good area that breaks even on the rent or even eat a modest amount (usually-$500 or so is justifiable for the principal pay down) and wait.

 Oh I hear that. But I dont think its on life support. I think it'll pull through, but hey maybe im just an optimist. I love DC character, and areas even like SE we are seeing a lot more pull for larger higher end apartments and condos being built. Dont get me wrong, a city is a city. But there is always constant movement in and out so I dont think itll ever die completely. 

I feel a lot of those making the BRRR moves often forget about the large market of travel nurses needing housing near hospitals. Especially Childrens Hospital. It's as simple as opening up their rentals for pets which makes the travel nurses lives way easier.

My fiancee often finds it difficult for her and her friend to find housing in cities that offer no room for pets. But its a huge market for what they are getting paid right now $$$$$

Just my 2 cents on looking at from personal experience. I know those hospitals are hurting on staff #'s so they outsource A LOT.

We have a Fix n Flip right now for 475k in Petworth, reno is prob at a higher range to get most bang for buck but reno comps go for 800-1.1mil depending on how beautiful you want to make it. The pending contract two as is comps are 460 and about 540k (off top of my head), only on market for 4 and 7 days. So I think yes, the fix and flip for the higher amount is better bang for buck right now. 

 Again not saying dc is on life support, in fact I think D.C. has some fantastic deals right now, and I’m more bullish on dc than I’ve been in years, I’m saying brrring is on life support because of interest rates, labor costs and flat to declining rents, that may all change in 2-3 years but on a brrrr/flip your time horizon is much shorter, 6 months or so, not to mention again if I can get a property for less money in the deal buying turn key why would I brrrr? 

[Tyler Welch]

Quote from @Jack Seiden:

Quote from @Tyler Welch:

Quote from @Jack Seiden:

Quote from @Tyler Welch:

I'm looking to hear from investors in the DMV on how their BRRRR properties are doing in this current market? Any tricks and tips! Lets talk!

BRRRR in D.C. region is on life support if not dead , the suburbs the cost of reno plus purchase is usually more than buying turn key. D.C. has some value add but you end up leaving a ton of cash in the deal (because refinancing is only 75% ltv vs up to 96.5% owner occupied usually more cash in the deal than turn key.) and finally the areas in D.C. where brrring makes sense after refi you cash flow would be sharply negative often -1k-$1500, it's the reason I never keep my flips as rentals. Want to make money in D.C. buy something in a good area that breaks even on the rent or even eat a modest amount (usually-$500 or so is justifiable for the principal pay down) and wait.

 Oh I hear that. But I dont think its on life support. I think it'll pull through, but hey maybe im just an optimist. I love DC character, and areas even like SE we are seeing a lot more pull for larger higher end apartments and condos being built. Dont get me wrong, a city is a city. But there is always constant movement in and out so I dont think itll ever die completely. 

I feel a lot of those making the BRRR moves often forget about the large market of travel nurses needing housing near hospitals. Especially Childrens Hospital. It's as simple as opening up their rentals for pets which makes the travel nurses lives way easier.

My fiancee often finds it difficult for her and her friend to find housing in cities that offer no room for pets. But its a huge market for what they are getting paid right now $$$$$

Just my 2 cents on looking at from personal experience. I know those hospitals are hurting on staff #'s so they outsource A LOT.

We have a Fix n Flip right now for 475k in Petworth, reno is prob at a higher range to get most bang for buck but reno comps go for 800-1.1mil depending on how beautiful you want to make it. The pending contract two as is comps are 460 and about 540k (off top of my head), only on market for 4 and 7 days. So I think yes, the fix and flip for the higher amount is better bang for buck right now. 

 Again not saying dc is on life support, in fact I think D.C. has some fantastic deals right now, and I’m more bullish on dc than I’ve been in years, I’m saying brrring is on life support because of interest rates, labor costs and flat to declining rents, that may all change in 2-3 years but on a brrrr/flip your time horizon is much shorter, 6 months or so, not to mention again if I can get a property for less money in the deal buying turn key why would I brrrr? 

 Oh my bad man its been a long day I misread your first sentence lol. 

10000% Yep agreed. Permitting in DC and the historic side can cause some setbacks as well i bet. 

What are your thoughts on NOVA area? Do you have any properties over there? I see airbnb actually picking up around the PWC area which is strange regarding its location to the city.

[Jack Seiden]

Quote from @Tyler Welch:

Quote from @Jack Seiden:

Quote from @Tyler Welch:

Quote from @Jack Seiden:

Quote from @Tyler Welch:

I'm looking to hear from investors in the DMV on how their BRRRR properties are doing in this current market? Any tricks and tips! Lets talk!

BRRRR in D.C. region is on life support if not dead , the suburbs the cost of reno plus purchase is usually more than buying turn key. D.C. has some value add but you end up leaving a ton of cash in the deal (because refinancing is only 75% ltv vs up to 96.5% owner occupied usually more cash in the deal than turn key.) and finally the areas in D.C. where brrring makes sense after refi you cash flow would be sharply negative often -1k-$1500, it's the reason I never keep my flips as rentals. Want to make money in D.C. buy something in a good area that breaks even on the rent or even eat a modest amount (usually-$500 or so is justifiable for the principal pay down) and wait.

 Oh I hear that. But I dont think its on life support. I think it'll pull through, but hey maybe im just an optimist. I love DC character, and areas even like SE we are seeing a lot more pull for larger higher end apartments and condos being built. Dont get me wrong, a city is a city. But there is always constant movement in and out so I dont think itll ever die completely. 

I feel a lot of those making the BRRR moves often forget about the large market of travel nurses needing housing near hospitals. Especially Childrens Hospital. It's as simple as opening up their rentals for pets which makes the travel nurses lives way easier.

My fiancee often finds it difficult for her and her friend to find housing in cities that offer no room for pets. But its a huge market for what they are getting paid right now $$$$$

Just my 2 cents on looking at from personal experience. I know those hospitals are hurting on staff #'s so they outsource A LOT.

We have a Fix n Flip right now for 475k in Petworth, reno is prob at a higher range to get most bang for buck but reno comps go for 800-1.1mil depending on how beautiful you want to make it. The pending contract two as is comps are 460 and about 540k (off top of my head), only on market for 4 and 7 days. So I think yes, the fix and flip for the higher amount is better bang for buck right now. 

 Again not saying dc is on life support, in fact I think D.C. has some fantastic deals right now, and I’m more bullish on dc than I’ve been in years, I’m saying brrring is on life support because of interest rates, labor costs and flat to declining rents, that may all change in 2-3 years but on a brrrr/flip your time horizon is much shorter, 6 months or so, not to mention again if I can get a property for less money in the deal buying turn key why would I brrrr? 

 Oh my bad man its been a long day I misread your first sentence lol. 

10000% Yep agreed. Permitting in DC and the historic side can cause some setbacks as well i bet. 

What are your thoughts on NOVA area? Do you have any properties over there? I see airbnb actually picking up around the PWC area which is strange regarding its location to the city.

I think Airbnb is a bubble, think mid term is possibly one too, this is not to sound negative and like a naysayer, again if you find good deals which there are tons of, break even or even lose a little cash flow, and wait for rent growth/appreciation you’ll kill it in 5-10 years time. But these ways of jucing cash flow sound a lot better in theory than in practice (big fan of the efficient markets theory which posits that if you are getting an outsized return there is hidden risk somewhere.) you should buy real estate because with smart leverage it’s the best coc return you can get, doesn’t make it a magical asset class, I think people who go back to fundamentals investing have a great opportunity and will do quite well, I think people who try to significantly beat market returns don’t realize the risk they are taking and the ability to get wiped out.

[Tyler Welch]

That's great advice. All in all I am newer to the investment side of things. And as I have gotten older I have seen more often times than not people are over thinking and over complicating. 

I think Virginia has a huge market for 5-10 year growth like you said. Especially the Northern Va and even outsourcing to Stafford. WFH has pushed a lot of people west, and pockets of areas are showing a lot of growth. 

Can you go into more detail on the efficient markets theory? And give me an example? 

[Jack Seiden]

Quote from @Tyler Welch:

That's great advice. All in all I am newer to the investment side of things. And as I have gotten older I have seen more often times than not people are over thinking and over complicating. 

I think Virginia has a huge market for 5-10 year growth like you said. Especially the Northern Va and even outsourcing to Stafford. WFH has pushed a lot of people west, and pockets of areas are showing a lot of growth. 

Can you go into more detail on the efficient markets theory? And give me an example? 

 This is extremely simple example obviously life is much more complicated, but a u.s. bond pays 5% interest and pays out 100% of the time. A 2nd world bond pays out 10% but defaults 50% of the time=5% expected return. A 3rd world bond pays out 20% defaults 75% of the time= 5 expected return.

[Tyler Welch]

Quote from @Jack Seiden:

Quote from @Tyler Welch:

That's great advice. All in all I am newer to the investment side of things. And as I have gotten older I have seen more often times than not people are over thinking and over complicating. 

I think Virginia has a huge market for 5-10 year growth like you said. Especially the Northern Va and even outsourcing to Stafford. WFH has pushed a lot of people west, and pockets of areas are showing a lot of growth. 

Can you go into more detail on the efficient markets theory? And give me an example? 

 This is extremely simple example obviously life is much more complicated, but a u.s. bond pays 5% interest and pays out 100% of the time. A 2nd world bond pays out 10% but defaults 50% of the time=5% expected return. A 3rd world bond pays out 20% defaults 75% of the time= 5 expected return.

 10/10 response. Thanks for breaking that down, I understand exactly what you mean! 

[Jay Thomas]

Having capital to invest in Real Estate is essential to success when it comes to BRRRRing in DC. The typical acquisition price of a property can range from $550-650k, with an additional $150-250k for renovations. To be successful at BRRRRing Real Estate investments, having sufficient capital available is the number one tip.

To maximize your chances of success and increase returns, it’s important to have a great understanding of the local market and its trends. Knowing which properties are worth investing in and what renovations will add the most value will help you get closer to achieving your goals. Before jumping into any Real Estate investment project, make sure you have researched the area thoroughly and have enough capital to get you through any unexpected expenses. Good luck!

[Bobby Feinman]

To EVERYONE that has posted on this thread...thank you for an AWESOME thread!! Every response has been informative, helpful and useful. I am a lender "down the street" in VA Beach. Left the DMV 30 years ago and have a son living in DC.

We assist many of our clients with BRRRR, providing short term funding followed by a DSCR cash out. Love the DMV and am wanting to increase our presence there. Will be placing an ad in the classified section soon for LO's.

Thanks again for the content. Look forward to seeing much more!

[Jeremy D.]

I just finished my Reno BRRRR project but missed the window on rates. With them being in the 6's now I'm switching to what @Cassidy Burns said and getting a HELOC from Arlington Community Federal Credit Union. Which is offering almost 100% LTV. All this was done on a owner-occupied loan paying 3.5% down and funding the renovations with a 203k loan. Wish I could do it again but I can't get refinanced into a conventional loan until the rates fall back down a bit more which would free up having another FHA loan to use.

[Tyler Welch]

@Jeremy D. How many do you plan to do in the area this year? I can definitely understand that frustration.