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BRRRR - Buy, Rehab, Rent, Refinance, Repeat

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Jonathan McEntee
  • Real Estate Agent
  • Phoenix, AZ
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Investing in 55+ Communities (Pros & Cons?)

Jonathan McEntee
  • Real Estate Agent
  • Phoenix, AZ
Posted May 23 2023, 09:59

Good morning everyone!

Just wanted to get some insight from investors that have or are currently flipping and/or renting properties in 55+ communities in Arizona. I work with hundreds of investors across the state and a majority stay away from 55+ communities. The obvious con I see is that your target re-sell market is smaller and HOA's can be high with strict regulations. But what are some pros? Why do some investors prefer 55+ communities? Any feedback is greatly appreciated. Thank you.

Happy investing,

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Andrew Postell
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#1 Creative Real Estate Financing Contributor
  • Lender
  • Fort Worth, TX
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Andrew Postell
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#1 Creative Real Estate Financing Contributor
  • Lender
  • Fort Worth, TX
Replied May 23 2023, 10:13

@Jonathan McEntee this is the BRRRR forum and most of us are "buy-and-hold" investors. If you want some feedback about flipping just post this in the Flipping forum. You'll get a few more responses there. Also, if you are asking about local advice specifically then hit up some local real estate groups in your area. Meetup.com is a good resource for those but some of the groups will also post here on Bigger Pockets Marketplace too. Even facebook might have some good local groups for you. But post locally for this. That's the best bet.

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Bill Brandt#2 Creative Real Estate Financing Contributor
  • Investor
  • Las Vegas, NV
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Bill Brandt#2 Creative Real Estate Financing Contributor
  • Investor
  • Las Vegas, NV
Replied May 23 2023, 11:02

Less wear and tear. Longer average stay. Amenities for people who can't/do drive as well. (Community busses and golf cart use.)Usually a pretty well off tenant. IF you believe there is a limited buyer pool lowering prices when you go to sell, it's also true when you go to buy. But I think you'll find it's a non-facto. High HOA fees can be a bigger drag on selling prices, but that means cheaper for you to buy.

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Ben Firstenberg
  • Investor
  • Cleveland
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Ben Firstenberg
  • Investor
  • Cleveland
Replied May 24 2023, 10:53

There's definitely a more limited exit strategy. Such communities are also much more mgmt intensive, since you’re expected to provide additional amenities. Lenders won't like these properties as much, since it's harder to underwrite the income. And of course your renter pool is much smaller. 

The advantage is you can charge a serious rent premium compared to non age restricted rentals. It's not unusual for 55+ communities to exceed the market by $500-1000+ in rent PER MONTH. I once saw a 55+ community in California (about an hour north of LA) that was renting 1 beds for $5-6k. I forget what the market rate was, but it wasn't nearly that high! But like I said, that comes with much more serious amenities.