BRRRR Success in PA?

Question

Have any new-ish investors had success with a BRRRR within an hour of Philly (from Allentown to Wilmington) ? I am just getting started, and I would be grateful to hear how you did it. What markets did you like? Did you find good PMs, contactors, lenders, etc? I have about 50k of capital to invest, and I'd love to learn from your experience.

Greg Kasmer · Answer

@Ryan Klein - I've done BRRRs in the Philadelphia suburbs - and particularly Delaware County. I'm working on an quad project right now that needs work, but will be a good long term hold. I also attend several real estate club meetings (DIG and DPI) in the area, so happy to network and connect. Message me and we'll talk!

Matthew Constantini · Answer

@Ryan Klein Welcome to the community! I'd love to connect you with the resources you'll need to invest in the Philly market. Ill shoot you a DM.

Ryan Klein · Answer

Thanks guys! @Justin Brown, are you saying the market is still good for rehabs, but it's difficult to rent and get cash flow? Why is that? And I will definitely check out the Lehigh valley group.

Justin Brown · Answer

Hey @Ryan Klein, thanks for reaching out! I’m in the Allentown market. I have had the opportunity todo a few BRRRR’s. Most of them were a couple years ago and because of the market I’m mostly working on flipping now. That being said in my investors group I know folks that are still making it work. It’s probably beating a dead horse but it just depends on the deal, but I would say there are still deals to be had for sure, just having to look a little harder. There is info about our group over in the events section if you are invested in connecting more about the Lehigh Valley market!

Alan Asriants · Answer

Hey Ryan!

BRRRR is a really tough strategy in today’s market—especially if you’re trying to buy in solid locations. The market is bonkers, and fixer-uppers are selling at a premium, which means there’s often not enough sweat equity in most deals to comfortably pull out money, create equity, and cash flow. This is a dilemma I’m currently facing myself. I bought a home for very cheap that needs a ton of renovation work, but even after all that effort, I still can’t get the darn thing to cash flow.

BRRRR can work in C–D neighborhoods, but that’s a different type of asset class—one I personally don’t vouch for. Most investors in those areas end up burnt out and eventually sell off their properties because of the constant upkeep and tenant-related headaches.

BRRRR was hot back when no one really knew about real estate, prices were reasonable, and you could cash flow with 0% down. That’s just not the nature of the market anymore.

For most people, I’ve found that the best strategy today is a long-term house hack—either a small multifamily or a single-family home that you live in first and eventually turn into a rental. If you do that 2–3 times over the course of 5 or so years, you’ll be far ahead.

Hope this helps—reach out anytime!

Yuriy Skripnichenko · Answer

@Alex Bekeza thank you for the tag.

I invest in Philly only and buy and hold only, no flips. And we do manage properties here in Philly as well. Feel free to connect.

Cheers,

Yuriy

Alex Bekeza · Answer

@Ryan Klein You should connect with @Yuriy Skripnichenko.  He's an experienced BRRRR investor himself and Property Manager in Philadelphia.

Moishy Hoffman · Answer

@Matthew Constantini hey plz shoot me a dm too

thanks

Justin Brown · Answer

Yeah that is what I’m seeing. Rents are high too, don’t get me wrong. It depends on your strategy. Because the market is good for selling it’s hard to not take the 40K payout vs the 100/month cash flow.

David Ribardo · Answer

@Ryan Klein welcome to the community! @Justin Brown runs a great investment community and I'll second his advice. Go to his meetup, if you can!

The market is tight right now, with higher interest rates, limited inventory, and high purchase prices making acquisitions challenging. A few years ago we had plenty of these BRRRR deals on the MLS. Now, I have had most success with off-market opportunities.

As a new investor, focus on building your team. Be patient, and set reasonable expectations. If you try to swing for the fences with an aggressive BRRRR strategy, you may find it frustrating. If your goal is to get in the game, have a profitable investment, and build a team to set you up for future growth- the Allentown market will treat you well, even in its current state.

BRRRR Success in PA?

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