Markets for BRRR

BRRRR - Buy, Rehab, Rent, Refinance, Repeat
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Markets for BRRR

Hadar Giladi
Member since 2021 · 24 posts · 14 votes

Hi everyone!

I've got some properties up in the DFW area. Right now, finding properties around there that work for that BRRRR strategy is really difficult. The property taxes and interest rates are just eating away at the cash flow, so I'm pretty much stuck doing flips in that market.

Wanted to get your advice and hear your thoughts on where might be a good market for the BRRRR method these days? I know a lot depends on the specific deal, but there's gotta be some markets out there where it's easier to find properties that are 70% of ARV and still cash flow pretty decent, right?

Let me know what you think - I'm all ears!
Trying to figure out the best move for growing my portfolio, so any input would be much appreciated.

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Samuel DioufBusiness Member
Real Estate Agent · Columbus & Cleveland, OH · Member since 2023 · 1k+ posts · 1k+ votes
2y

A lot of OOS investors are having great success with BRRRRs here in Ohio. I like Columbus because of the appreciation, but you may have to leave some money in your deal because the city is growing so fast.

Cleveland is another market where BRRRRs work. You just need to make sure you hire out the right contractors, as there are a lot of unreliable GCs there. 

[email protected]614-662-1652
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  • Travis Main
    Lender · Orlando, FL · Member since 2023 · 220 posts · 183 votes
    2y

    Hey Hadar, 

    Instead of focusing on established hot markets like DFW, you might want to explore emerging markets where property values are still reasonable, but there's potential for growth. Cities in the Midwest and Southeast, like Indianapolis, Kansas City, Birmingham, and parts of Ohio, are often mentioned as good BRRRR markets. These areas typically have lower property taxes and more favorable price-to-rent ratios.

    Sometimes, the best deals are found outside of the major metro areas. Look for secondary or tertiary markets within a reasonable distance from larger cities. These areas often have less competition, lower prices, and better cash flow potential. For example, instead of Dallas or Fort Worth, you might look into cities like Waco, Tyler, or Sherman-Denison in Texas.

    Best Regards, 

    4Reply
  • Hadar Giladi
    OP
    Member since 2021 · 24 posts · 14 votes
    2y

    Thank you for the detailed response! I’m in full agreement with everything you wrote. As an example, the most recent property we acquired is situated in Waco:)

    2Reply
  • Travis Main
    Lender · Orlando, FL · Member since 2023 · 220 posts · 183 votes
    2y

    That's great! You are clearly doing your homework. All we can do in constantly moving housing market is stay up to speed with your research on future markets. 

    3Reply
  • Daniel Bergless
    Real Estate Agent · Pittsburgh · Member since 2024 · 3 posts · 2 votes
    2y

    Hey Hadar,

    Im a local agent here in Pittsburgh, and the firm that I work with focuses on distressed properties for investors, and from the numbers we have seen most of the opportunities we sell are typically 75% of the local ARV minus any repairs. If expanding out here or learning more is something you're interested in I would love to be of help to you! Feel free to reach out at any time!

    1Reply
  • Bruce Lynn
    Real Estate Broker · Coppell, TX · Member since 2011 · 5k+ posts · 4k+ votes
    2y

    I'd look around the edges of DFW.....draw a big circle around the DFW area and then invest just on the outside of it.

    I think Waco is pretty tough right now.  Tons of rentals it seems.  Prices look attractive, but lots of investors there.

    Decatur is probably a place to look, Krum, Gainesville, Sherman Denison, Midlothian, Weatherford, places that aren't off the radar, but still have good growth prospects and maybe a few demand drivers.

    2Reply
  • Samuel DioufBusiness Member
    Real Estate Agent · Columbus & Cleveland, OH · Member since 2023 · 1k+ posts · 1k+ votes
    2y

    A lot of OOS investors are having great success with BRRRRs here in Ohio. I like Columbus because of the appreciation, but you may have to leave some money in your deal because the city is growing so fast.

    Cleveland is another market where BRRRRs work. You just need to make sure you hire out the right contractors, as there are a lot of unreliable GCs there. 

    [email protected]614-662-1652
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    5Reply
  • Kerlous TadresBusiness Member
    Realtor · Columbus, OH · Member since 2023 · 1k+ posts · 1k+ votes
    2y
    Quote from @Hadar Giladi:

    Hi everyone!

    I've got some properties up in the DFW area. Right now, finding properties around there that work for that BRRRR strategy is really difficult. The property taxes and interest rates are just eating away at the cash flow, so I'm pretty much stuck doing flips in that market.

    Wanted to get your advice and hear your thoughts on where might be a good market for the BRRRR method these days? I know a lot depends on the specific deal, but there's gotta be some markets out there where it's easier to find properties that are 70% of ARV and still cash flow pretty decent, right?

    Let me know what you think - I'm all ears!
    Trying to figure out the best move for growing my portfolio, so any input would be much appreciated.

    Hey Haddar, 

    I have done 2 BRRRR's so far. I can tell you the biggest thing is as long as you run your numbers tight and have good contractors you can be pretty successful at it. Just choose the right market for you that would help you become the most successful!
    [email protected]614-490-1163
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    3Reply
  • Marcus Auerbach
    Investor · Milwaukee - Mequon, WI · Member since 2010 · 5k+ posts · 7k+ votes
    2y

    The main issue with BRRRR is tight inventory. If you have only 1 month supply everything sells and sellers don't have to offer much discount.

    I have been BRRRR-ing for over a decade in Milwaukee and it's not like deals were always easy to find, but once a house has been sitting on the market for 6 months, sellers get more motivated to discuss a less than ideal priced offer. In this market, they don't have to.

    However, we have now also an element that makes our job much easier as investors: appreciation. It used to take me 6 months to complete a full rehab and have a tenant moved in. Today, if you wait a little longer, appreciation alone has picked up almost a third of what we were aiming to force through a high-effort rehab. Now it's just sit and wait.

    Don't give up your home-field advantage, it will cost you more than you think.

    1Reply
  • Andrew SyriosPro Member
    Moderator
    Residential Real Estate Investor · Kansas City, MO · Member since 2014 · 10k+ posts · 5k+ votes
    2y

    Best markets for BRRRR deals tend to be lower priced but stable cities, particularly in the Southeast and Midwest. That being said, with rates and prices where they are these days BRRRR is very difficult in just about every market.

    Podcast Guest on Show #121
    1Reply
  • Simon Ashbaugh
    Realtor · Columbus Ohio, Cleveland Ohio · Member since 2022 · 849 posts · 830 votes
    2y

    Hey Hadar, I would recommend that you explore the Ohio area. Cleveland offers a mix of affordable housing options and a solid rental market. Columbus is another city to consider. It's strong job market, growing population and a mix of affordable and appreciating properties makes it a favorable area to invest in. 

    2Reply
  • Jimmy LieuBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2019 · 3k+ posts · 2k+ votes
    2y
    Quote from @Hadar Giladi:

    Hi everyone!

    I've got some properties up in the DFW area. Right now, finding properties around there that work for that BRRRR strategy is really difficult. The property taxes and interest rates are just eating away at the cash flow, so I'm pretty much stuck doing flips in that market.

    Wanted to get your advice and hear your thoughts on where might be a good market for the BRRRR method these days? I know a lot depends on the specific deal, but there's gotta be some markets out there where it's easier to find properties that are 70% of ARV and still cash flow pretty decent, right?

    Let me know what you think - I'm all ears!
    Trying to figure out the best move for growing my portfolio, so any input would be much appreciated.


    Hi Hadar, I would personally recommend looking into Columbus OH for doing the BRRRR strategy. I have completed quite a lot of BRRRRs myself as an investor here. You can still find positive cash flow deals here that hit the 1% rule and have lots of potential for appreciation. With so many major companies developing out here like Intel, Nationwide Hospital, Meta, Amazon, etc., the population and job market are both growing rapidly - overall great macroeconomics. Happy to connect and answer any questions you may have.

    [email protected]614-300-7535
    Jimmy Lieu, Red 1 Realty4.9120 Reviews
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    2Reply
  • Hadar Giladi
    OP
    Member since 2021 · 24 posts · 14 votes
    2y
    Quote from @Daniel Bergless:

    Hey Hadar,

    Im a local agent here in Pittsburgh, and the firm that I work with focuses on distressed properties for investors, and from the numbers we have seen most of the opportunities we sell are typically 75% of the local ARV minus any repairs. If expanding out here or learning more is something you're interested in I would love to be of help to you! Feel free to reach out at any time!


    Hi Daniel! 
    Thank you for the information! 
    It's amazing! I'd love to see some of these deals you've made recently if you'd like to share

    0Reply
  • Hadar Giladi
    OP
    Member since 2021 · 24 posts · 14 votes
    2y
    Quote from @Bruce Lynn:

    I'd look around the edges of DFW.....draw a big circle around the DFW area and then invest just on the outside of it.

    I think Waco is pretty tough right now.  Tons of rentals it seems.  Prices look attractive, but lots of investors there.

    Decatur is probably a place to look, Krum, Gainesville, Sherman Denison, Midlothian, Weatherford, places that aren't off the radar, but still have good growth prospects and maybe a few demand drivers.

    Hey, thanks so much for all the details! I totally agree with you, and that's really been my approach over the past few months. But even out in the suburbs, away from the city center, I'm still having a hard time finding good deals. And I should mention that I operate primarily off-market, so I've been thinking about diversifying into another market.

    1Reply
  • Hadar Giladi
    OP
    Member since 2021 · 24 posts · 14 votes
    2y
    Quote from @Samuel Diouf:

    A lot of OOS investors are having great success with BRRRRs here in Ohio. I like Columbus because of the appreciation, but you may have to leave some money in your deal because the city is growing so fast.

    Cleveland is another market where BRRRRs work. You just need to make sure you hire out the right contractors, as there are a lot of unreliable GCs there. 

    Hey there! The truth is, I've been looking into the Columbus market lately and doing a bit of research to see what's going on. From what I can tell, there seems to be very few transactions happening in the under $150k price range. So it's a little tough for me to get a good feel for whether the inventory is just really low, which is why the volume of deals in that segment seems so limited.
    What do you think? 

    1Reply
  • Hadar Giladi
    OP
    Member since 2021 · 24 posts · 14 votes
    2y
    Quote from @Marcus Auerbach:

    The main issue with BRRRR is tight inventory. If you have only 1 month supply everything sells and sellers don't have to offer much discount.

    I have been BRRRR-ing for over a decade in Milwaukee and it's not like deals were always easy to find, but once a house has been sitting on the market for 6 months, sellers get more motivated to discuss a less than ideal priced offer. In this market, they don't have to.

    However, we have now also an element that makes our job much easier as investors: appreciation. It used to take me 6 months to complete a full rehab and have a tenant moved in. Today, if you wait a little longer, appreciation alone has picked up almost a third of what we were aiming to force through a high-effort rehab. Now it's just sit and wait.

    Don't give up your home-field advantage, it will cost you more than you think.

    Thanks for that interesting perspective. I definitely agree with you there - the appreciation potential is a really key factor. Though I don't actually plug that into my spreadsheets, since it's a bit speculative. I just kind of treat any value increase as a nice bonus on top of the core deal terms.

    0Reply
  • Hadar Giladi
    OP
    Member since 2021 · 24 posts · 14 votes
    2y
    Quote from @Simon Ashbaugh:

    Hey Hadar, I would recommend that you explore the Ohio area. Cleveland offers a mix of affordable housing options and a solid rental market. Columbus is another city to consider. It's strong job market, growing population and a mix of affordable and appreciating properties makes it a favorable area to invest in. 

    Appreciate the suggestion, Simon. I'll definitely look into the Cleveland and Columbus markets more closely. The affordable housing and solid rental potential in those Ohio cities sound really appealing. Exploring options outside the major coastal metros could be a smart move. Thanks for the tip!

    1Reply
  • Hadar Giladi
    OP
    Member since 2021 · 24 posts · 14 votes
    2y
    Quote from @Jimmy Lieu:
    Quote from @Hadar Giladi:

    Hi everyone!

    I've got some properties up in the DFW area. Right now, finding properties around there that work for that BRRRR strategy is really difficult. The property taxes and interest rates are just eating away at the cash flow, so I'm pretty much stuck doing flips in that market.

    Wanted to get your advice and hear your thoughts on where might be a good market for the BRRRR method these days? I know a lot depends on the specific deal, but there's gotta be some markets out there where it's easier to find properties that are 70% of ARV and still cash flow pretty decent, right?

    Let me know what you think - I'm all ears!
    Trying to figure out the best move for growing my portfolio, so any input would be much appreciated.


    Hi Hadar, I would personally recommend looking into Columbus OH for doing the BRRRR strategy. I have completed quite a lot of BRRRRs myself as an investor here. You can still find positive cash flow deals here that hit the 1% rule and have lots of potential for appreciation. With so many major companies developing out here like Intel, Nationwide Hospital, Meta, Amazon, etc., the population and job market are both growing rapidly - overall great macroeconomics. Happy to connect and answer any questions you may have.

    Thanks for the great recommendation, that's really helpful. Columbus does sound like it could be a promising market to explore the BRRRR strategy. The positive cash flow deals, 1% rule potential, and strong job/population growth are all very appealing. I appreciate you sharing your firsthand experience completing successful BRRRRs in the area. I'd definitely be interested in learning more and getting your insights. Would you be open to hopping on a quick call sometime to discuss the Columbus market in more detail? 

    1Reply
  • Marcus Auerbach
    Investor · Milwaukee - Mequon, WI · Member since 2010 · 5k+ posts · 7k+ votes
    2y
    Quote from @Hadar Giladi:
    Quote from @Marcus Auerbach:

    The main issue with BRRRR is tight inventory. If you have only 1 month supply everything sells and sellers don't have to offer much discount.

    I have been BRRRR-ing for over a decade in Milwaukee and it's not like deals were always easy to find, but once a house has been sitting on the market for 6 months, sellers get more motivated to discuss a less than ideal priced offer. In this market, they don't have to.

    However, we have now also an element that makes our job much easier as investors: appreciation. It used to take me 6 months to complete a full rehab and have a tenant moved in. Today, if you wait a little longer, appreciation alone has picked up almost a third of what we were aiming to force through a high-effort rehab. Now it's just sit and wait.

    Don't give up your home-field advantage, it will cost you more than you think.

    Thanks for that interesting perspective. I definitely agree with you there - the appreciation potential is a really key factor. Though I don't actually plug that into my spreadsheets, since it's a bit speculative. I just kind of treat any value increase as a nice bonus on top of the core deal terms.


    Appreciation being speculative has been a long-standing narrative. Stating anything else would be foolish, wouldn't it?

    IDK, I start to question that believe a little. After posting a monthly market update for Milwaukee every month for the last 5 years and looking at the data every month and the dynamic that makes prices inch up month after month it is becoming more of a certainty to me than a possibility.

    Because the reasons don't change: we keep devaluating the paper dollar, we still have a chronic housing shortage and we are not building nearly enough to even keep up, let alone to catch up from the deficit we carry. So short of a pandemic wiping out a chunk of our local population or something else of that magnitude, there is not really much that can change these circumstances driving supply and demand.

    And without changing the circumstances, the results will be the same. Now of course we don't know what any given year will hold, because the market can be influenced by a lot of things. But that does not change the overall direction when you look at timeframes like a decade. And that get's even more confirmed when you look at home prices long term, like since WW2.

    It's like: I don't know if we are going to have snow for Christmas, or how much snow exactly it will be, but it's Wisconsin and so it's pretty safe to predict (even though maybe not 100%) we are going to have snow at some point next winter and the total accumulation is going to be probably around 30-50 inches.

    My operating assumption is that home prices are going to double (again) over the next ten years, just like the did over the last 10.

    0Reply
  • Jeff Roth
    Real Estate Consultant · Ann Arbor, MI · Member since 2022 · 466 posts · 257 votes
    2y

    Hi Hadar-

    Great question. 

    You are asking about markets where you can Buy, Rehab, Rent out, Refinance, and Repeat (BRRRR Method) where you can buy 70% of After Repair Value and under $150,000 with good cashflow.

    This is my favorite strategy as well.

    There are several markets in Michigan where you can do this but the market I prefer is Lansing, MI.

    It is the State capitol, there is always a lot of economic development as a result which creates jobs and demand for housing which keeps rents up and appreciation steady.

    To Your Success! 

    0Reply
  • Drew SygitBusiness Member
    Property Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
    2y

    @Hadar Giladi most of the Midwest cities you can still BRRR, but you have to make sure someone doesn't take advantage of you by selling you something they represent as Class B, when it's really Class C or D.

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  • Account Closed
    Realtor · Cleveland, OH · Member since 2023 · 340 posts · 215 votes
    2y

    Hi, people/clients would definitely agree that Ohio is a good place to invest in real estate. Thanks for reaching out with any questions that you have about Ohio. Best Wishes!

    1Reply
  • Joseph Bui
    Lender · Nationwide · Member since 2023 · 362 posts · 237 votes
    2y

    I'm based in Seattle, but I do BRRRRs in Detroit and Memphis (recently mainly Detroit). I'm at 9 doors now and continue to look to scale. Happy to connect and knowledge share.

    2Reply
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