Top Markets for BRRRR 2024
Hi BP,
Based in CA and gearing up for my first BRRRR (remotely). I'm in the process of choosing a market to focus on and wanted input on strong BRRRR markets right now. Looking for your suggestions.
I'm aiming for the best shot at getting as much money out of the deal so I can do several more. Specifically, eyeing entry-level markets with all in purchase + rehab between $80k to $170k.
What markets do you think I could maximize the likelihood of recouping most, if not all, of my cash? I’m in discussions with teams in Memphis and Detroit, but I'm still open to exploring other markets before making a final decision.
Thanks in advance for any suggestion and input.
Quote from @Josh Mac:
Quote from @Travis Biziorek:
Quote from @Josh Mac:
Quote from @Travis Biziorek:
Hey Ryan, I'd be another vote for Detroit.
I personally have 12-doors there and focused on the BRRRR method when I was building my portfolio. I help investors do the same thing. I actually moved from the Bay Are to Detroit Metro from 2017-2022 but I'm back in CA now.
Getting all of your cash out is fantastic, but not always doable. That said, we're still having success doing it but it's become increasingly rare. I always tell folks to expect to leave $5,000 - $10,000 in a deal.
This assume you're all in for $75,000 - $95,000.
You're $80k - $170k range is pretty wide, and I'd be surprised if anything over ~$130k ARV actually produces net cash flow assuming 75% LTV on a refi. If you're ok running slightly negative cash flow in an effort to get your capital back, that's a different story. And it will open up a few more options for you.
Hello Travis,how many deals are you doing a month lately?And has the market been shifting overthere?
Our firm has done more than 150 deals this year already.
We're seeing a lot of investor demand for two main reasons:
1) Folks are starting to realize Detroit's potential
2) A lot of previously decent markets no longer pencilVery nice!Sounds like your killing it over there.Hiw long does a deal take from start to finish?Also what grade neighborhoods are you doing?
We're operating largely in C/C+ neighborhoods. It tends to be the sweet spot in Detroit today because it offers the best risk-adjusted cash flow. And if you're smart about where you're buying there's a lot of potential for those areas to quickly transition to B-/B in a handful of years.
A lot is happening in Detroit where neighborhoods are seeing some serious revitalization.
Typical renovation is taking us 2-3 months right now.
Quote from @Travis Biziorek:
Quote from @Josh Mac:
Quote from @Travis Biziorek:
Quote from @Josh Mac:
Quote from @Travis Biziorek:
Hey Ryan, I'd be another vote for Detroit.
I personally have 12-doors there and focused on the BRRRR method when I was building my portfolio. I help investors do the same thing. I actually moved from the Bay Are to Detroit Metro from 2017-2022 but I'm back in CA now.
Getting all of your cash out is fantastic, but not always doable. That said, we're still having success doing it but it's become increasingly rare. I always tell folks to expect to leave $5,000 - $10,000 in a deal.
This assume you're all in for $75,000 - $95,000.
You're $80k - $170k range is pretty wide, and I'd be surprised if anything over ~$130k ARV actually produces net cash flow assuming 75% LTV on a refi. If you're ok running slightly negative cash flow in an effort to get your capital back, that's a different story. And it will open up a few more options for you.
Hello Travis,how many deals are you doing a month lately?And has the market been shifting overthere?
Our firm has done more than 150 deals this year already.
We're seeing a lot of investor demand for two main reasons:
1) Folks are starting to realize Detroit's potential
2) A lot of previously decent markets no longer pencilVery nice!Sounds like your killing it over there.Hiw long does a deal take from start to finish?Also what grade neighborhoods are you doing?
We're operating largely in C/C+ neighborhoods. It tends to be the sweet spot in Detroit today because it offers the best risk-adjusted cash flow. And if you're smart about where you're buying there's a lot of potential for those areas to quickly transition to B-/B in a handful of years.
A lot is happening in Detroit where neighborhoods are seeing some serious revitalization.
Typical renovation is taking us 2-3 months right now.
Thanks for that,yeah that is a decent time-frame.How much does a 3 bed rent for out there on average?
Quote from @Josh Mac:
Quote from @Travis Biziorek:
Quote from @Josh Mac:
Quote from @Travis Biziorek:
Quote from @Josh Mac:
Quote from @Travis Biziorek:
Hey Ryan, I'd be another vote for Detroit.
I personally have 12-doors there and focused on the BRRRR method when I was building my portfolio. I help investors do the same thing. I actually moved from the Bay Are to Detroit Metro from 2017-2022 but I'm back in CA now.
Getting all of your cash out is fantastic, but not always doable. That said, we're still having success doing it but it's become increasingly rare. I always tell folks to expect to leave $5,000 - $10,000 in a deal.
This assume you're all in for $75,000 - $95,000.
You're $80k - $170k range is pretty wide, and I'd be surprised if anything over ~$130k ARV actually produces net cash flow assuming 75% LTV on a refi. If you're ok running slightly negative cash flow in an effort to get your capital back, that's a different story. And it will open up a few more options for you.
Hello Travis,how many deals are you doing a month lately?And has the market been shifting overthere?
Our firm has done more than 150 deals this year already.
We're seeing a lot of investor demand for two main reasons:
1) Folks are starting to realize Detroit's potential
2) A lot of previously decent markets no longer pencilVery nice!Sounds like your killing it over there.Hiw long does a deal take from start to finish?Also what grade neighborhoods are you doing?
We're operating largely in C/C+ neighborhoods. It tends to be the sweet spot in Detroit today because it offers the best risk-adjusted cash flow. And if you're smart about where you're buying there's a lot of potential for those areas to quickly transition to B-/B in a handful of years.
A lot is happening in Detroit where neighborhoods are seeing some serious revitalization.
Typical renovation is taking us 2-3 months right now.
Thanks for that,yeah that is a decent time-frame.How much does a 3 bed rent for out there on average?
$1,200 - $1,300/mo
@Ryan G.
I agree with the previous comments about doing a BRRRR OOS, requires a higher risk tolerance and looking at the property value and appreciation, not how much money getting out of the deal.
I invest in the Bay Area and Indianapolis metro area. I did a local renovation where I was on site every week.I attempted OOS BRRRR. When I ran my numbers I found the ARVs to be inflated and renovation costs underestimated. I don't mean to be pessimistic but I've talked to other CA investors who were ripped off by contractors, properties vandalized etc, especially Class C being far away. If you're looking at all in for $80k to $170k with rehab costs, you probably will be Class C and not Class A. I bought move in ready Class C Indy in 2023 - it's been a headache even though price points are low.
I would recommend an unbiased party (not anyone on the agent’s team, maybe an experienced local investor) do a video walk through of a property you’re considering an offer on if you can’t see it in person. And talk to local contractors who will give you honest feedback. You need a trusted team to do OOS investing and you’re still the best eyes and ears for your own property. Look at property tax rates and insurance rates and how much the taxes can increase.
I'm going to be the big dissenter here but if you can find something in Northern CA within driving distance it puts you at an advantage. You can do a BRRRR here - it's at a much higher price point. I also looked at Sacramento. Considered Nevada and Arizona (still OOS but a short flight or drive away) - they have low property taxes and appreciation. Good luck!
Hi @Ryan G.,
Nashville gets my vote! There are some neighborhoods outside the city that are great for BRRRR. Feel free to reach out if you want to discuss in depth!