I would have really liked to invest where i live, but Minnesota really does not have the price point for neighborhoods that will help scale Brrr.
As I am just starting out i would like to start in zipcodes which are not already exhausted with Brrr investors. Does anyone have suggestions on which US zipcodes are starting to grow with Brrr?
Attorney · Philadelphia · Member since 2018 · 2k+ posts · 3k+ votes
1y
@Kokil Sharma Since nobody has responded yet, I'll try my best to be the voice of reason. To start, I'd like to ask you a question: What is more important, purchasing real estate where you can obtain 100% return of your capital through the BRRRR investment method but otherwise break even or even worse lose money or alternatively leave some of your capital in the deal but earn a profit when the property is sold?
Most investors who focus their underwriting on successfully completing the BRRRR method ignore the fundamentals that are most indicative of a properties long term success. Remember, C/D located properties generally appraise once improved for significantly more than they will actually sell in an arms length transaction so you can go to many C/D neighborhoods, successfully complete the BRRRR method but deal with all of the operational difficulties of the asset class and then fail to achieve a sale figure remotely close to the favorable appraisal that allowed for the proceeds to be returned through the refinance.
I'm sure my post will be drowned out by a bunch of turn key operators, Realtors and lenders promoting markets with C/D properties but hopefully you will take some time to consider what I shared because most who focus solely on the BRRRR method work harder, not smarter in their real estate business.
I'm not suggesting you can't successfully complete the BRRRR method but if you are selecting your markets based on where that strategy is most attainable you're going to make regretful investment decisions because most who chime in will promote markets where you will be able to obtain a favorable cash out refinance while ignoring everything else that supports whether the market has a good underlying investment thesis or has a a more attainable alignment of sale values and appraisal values.