Out of state investing- BRRRR
Member since 2025 · 14 posts · 11 votes
Out of state investing- BRRRR
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Melissa JusticeBusiness Member
Rental Property Investor · Phoenix, AZ · Member since 2024 · 518 posts · 1k+ votesQuote from @Michael S.:
@Melissa Justice- I have no doubt you are very knowledgable about your own market in Detroit. That said, how much experience have you directly had recently in the Huntsville market? Your comments above suggest that you may have been active here several years ago. However, for the sake of OOS investors on BP not familiar with the market here, I'd like to make some comments to your statements above.
You recommended Huntsville for the following reasons, with my notations as follows:
"If your main goal is cash flow with fewer headaches" - actually, cash flow is non-existant currently for turnkey in Huntsville for A-C+ areas; off market with rehab, perhaps, but not in A to B neighborhoods right now
"Landlord-friendly laws" - agreed
"Stronger rent-to-price ratios" - disagree; average ratio here is now down to around 0.5 to 0.7%
"Options for fully renovated or new-build SFRs and duplexes" - duplexes are non-existent in Huntsville compared to other cities
"Professional property management built in" - certainly may be true, but I do not know who you use for property mgmt here
If you haven't truly been investing in Huntsville over the past 2 years, things are now dramatically different. FYI
To clarify, my original comment was more directed toward Birmingham and its surrounding metros, rather than Huntsville specifically. I work with investors across many landlord-friendly markets in the Midwest and Southeast, and with nearly 15 years of experience in the real estate industry, my role is to help clients evaluate which markets align with their individual investment goals, whether that’s cash flow, appreciation, or a mix of both.
You’re absolutely right that Huntsville has tightened in recent years - particularly in turnkey inventory and price-to-rent ratios, which are often closer to 0.5%–0.7% now. I still see value there in select situations, especially when long-term fundamentals are the focus.
That said, my comments were primarily highlighting Birmingham, where we’re seeing:
Steady job and population growth
Strong rental demand in B-class neighborhoods
Continued affordability compared to peer metros
Home value appreciation around 6.5% YoY (Zillow, Q1 2025), along with a relatively low cost of ownership due to Alabama’s low property taxes and landlord-friendly laws.
Additionally, in our space, especially with builder relationships offering seller incentives we’re often able to leverage concessions like rate buydowns to help create positive cash flow opportunities, even in today’s rate environment. Of course, this is always case-by-case and not a blanket solution for every deal, but when structured correctly, it does make a meaningful difference.
I work with vetted local teams in each market and always strive to pair investors with properties and partners that fit their goals and risk tolerance.
Appreciate the dialogue and always open to exchanging insights - collaboration in this space only makes us all better.
16 Replies
- 1yDrew SygitBusiness MemberProperty Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
@Cecilia Fields you're looking for Class D rentals?
Class D Properties:
Tenant Pool: Majority of FICO scores under 560, little to no good tradelines, lots of collections & chargeoffs, but should have no convictions/evictions in last 12 months. Verifying last 2-years of rental history and income/employment extremely important to find the “best of the worst”.
Tenant Default: 20-30% probability of eviction or early lease termination.Section 8: Class D rents meet program requirements, often challenges to pass Section 8 inspection.
Vacancies: 20%+, depending on market conditions and tenant screening.
Cashflow vs Appreciation: Typically, all cashflow with little, maybe even negative, relative rent & value appreciation.
Logical Property Management4.9458 Reviews - Member since 2025 · 14 posts · 11 votes1y
I saw your classification in a different post that you commented on, I found it to be very concise and informative. when reading it. I thought that class B or class C would be my target population
- 1yAJ ExnerPro MemberLender · Springfield, MO · Member since 2023 · 652 posts · 315 votes
Hey Cecilia,
A few recommendations, for what they are worth.
Definitely want to keep an eye on the specific purchase price and loan minimums. As well, in a few of those markets (Detroit/STL) if the rehab exceeds the purchase price as you get started, there might be lenders that would deny the loan based on that. So either vet that out if you can with the lender beforehand, or work with a good broker who knows the mechanisms and market well.
I would also recommend keeping the Multi-Family to 2-4 units if possible, especially as you get started. You will see a drastic reduction in lenders willing to lend to 5+ unit rehab deals, especially for folks getting started. Keeping it 2-4 will keep it under the same 'bracket' and keep leverage/rate manageable.
Out of state can be really tricky, so finding good Contractors in that area will probably be the trickiest but the thing that can make the biggest difference.
Good luck! Happy to help if and where I can.
- Lender · Elk Grove, CA · Member since 2016 · 190 posts · 94 votes1y
My advice is to not necessarily focus on large metro areas. There are hundreds of small-medium sized towns (not rural) with those price points but may have better figures and less competition. But wherever you pick, learn that market inside and out before you buy anything.
- 1yJimmy LieuBusiness MemberReal Estate Agent · Columbus, OH · Member since 2019 · 3k+ posts · 2k+ votes
Quote from @Cecilia Fields:
Hello everyone, I'm looking for some insight into the BRRRR method in several markets. Specifically Detroit MI, Highland park MI, Saint Louis MO, and Springfield MI. I'm thinking a extremely low purchase price, (50-90k) then Reno from there. I have a niche for multifamilies if that helps.
Just love to hear your thoughts, questions, concerns, or network recommendations for hard money lenders, real estate agents, contractors, even mentors would be appreciated!
Thank youI would love into Cleveland Ohio as well - you can still find houses for 50-90k!
Jimmy Lieu, Red 1 Realty4.9120 Reviews - 1yMelissa JusticeBusiness MemberRental Property Investor · Phoenix, AZ · Member since 2024 · 518 posts · 1k+ votes
Hey! I actually live right outside of Detroit and know the market well. While BRRRR can work here (and in places like St. Louis), it often comes with a lot of moving parts-unpredictable appraisals, higher rehab risks, and delayed refi timelines, especially in areas like Highland Park.
If your main goal is cash flow with fewer headaches, you might want to consider turnkey properties instead-especially in Midwest and Southeast markets. Think places like:
Birmingham or Huntsville, AL
Cleveland or Columbus, OH
Memphis, TN
Ocala or Cape Coral, FL (for newer builds)
These areas offer:
Landlord-friendly laws
Stronger rent-to-price ratios
Options for fully renovated or new-build SFRs and duplexes
Professional property management built in
You can still build a great portfolio and reinvest your cash flow or do strategic cash-out refis down the line-without the BRRRR stress upfront.
Happy to share a few markets that are performing well right now if you want to take a closer look!Best of luck,
Melissa
- 1ySam McCormackBusiness MemberReal Estate Agent · Cincinnati, OH/NKY · Member since 2021 · 1k+ posts · 833 votes
Quote from @Cecilia Fields:
Hello everyone, I'm looking for some insight into the BRRRR method in several markets. Specifically Detroit MI, Highland park MI, Saint Louis MO, and Springfield MI. I'm thinking a extremely low purchase price, (50-90k) then Reno from there. I have a niche for multifamilies if that helps.
Just love to hear your thoughts, questions, concerns, or network recommendations for hard money lenders, real estate agents, contractors, even mentors would be appreciated!
Thank youJust make sure you are doing it, not in a crap area. High crime, bad tenants, etc. can turn a deal on paper look great, to a poor investment real quick. If you can get something in a more quality area, do it!!
Sam McCormack Realtor - 1yDrew SygitBusiness MemberProperty Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
@Cecilia Fields glad you appreciate our concise/logical format - took a lot of research to do that:)
In Metro Detroit, Class C starts at around $80k minimum in the City of Detroit - even more in the suburbs/Ring Cities.
Class B will start at around $120k.
*This is assuming a standard 3 bed, 1 bath house at least 1,000 square feet.
DM us if you'd like to schedule a more indepth conversation:)
Logical Property Management4.9458 Reviews - Investor · Milwaukee - Mequon, WI · Member since 2010 · 5k+ posts · 7k+ votes1y
Quote from @Cecilia Fields:
Hello everyone, I'm looking for some insight into the BRRRR method in several markets. Specifically Detroit MI, Highland park MI, Saint Louis MO, and Springfield MI. I'm thinking a extremely low purchase price, (50-90k) then Reno from there. I have a niche for multifamilies if that helps.
Just love to hear your thoughts, questions, concerns, or network recommendations for hard money lenders, real estate agents, contractors, even mentors would be appreciated!
Thank youRehab will cost you roughly $50/sqft and the cost does not change whether your property is 50k or 250k, but on a 50k property, the rehab portion will be a huge % of the ARV, making it almost impossible to achieve enough upside.
I've been doing BRRRR's for over a decade and found the sweet spot at about 200k ARV, which typically means you have to buy at 100k to make the numbers work. That's for a single family homes. For a duplex you'll need a larger budget. In Milwaukee it's at least 25k per unit and 20-50k for the exterior, depending on how bad the siding is, if you have original wood windows and no stroms and what roof, chimney, garage and driveway looks like.
There is also a difference between class D properties and class D neighborhoods. I would personally not invest much below the median sales price, which is the deciding line between B and C neighborhoods. D is the lowest quadrant, half of the median.
Your ownership experience in a class D neighborhood is typically rough, the headache factor is the price for cash flow. Expect monthly issues, drama, unpaid rent, unpais utilities, trashed up properties. If that does not happen, consider it an exception and count your blessings. It's hard enough to do that locally, attempting this remote is a recipe for desaster.
- Member since 2025 · 14 posts · 11 votes1y
@Marcus Auerbach that makes sense! I didn't think to consider median purchase price. I appreciate the insight
- Investor · Orange County, CA · Member since 2014 · 363 posts · 408 votes1y
Careful, the markets you mentioned are known for high crime environments.
Study the neighborhoods and crime stats.
Just because a BRRRR looks good on paper does not mean it won't be a money pit.
- Huntsville, AL · Member since 2018 · 577 posts · 864 votes1y
@Melissa Justice- I have no doubt you are very knowledgable about your own market in Detroit. That said, how much experience have you directly had recently in the Huntsville market? Your comments above suggest that you may have been active here several years ago. However, for the sake of OOS investors on BP not familiar with the market here, I'd like to make some comments to your statements above.
You recommended Huntsville for the following reasons, with my notations as follows:
"If your main goal is cash flow with fewer headaches" - actually, cash flow is non-existant currently for turnkey in Huntsville for A-C+ areas; off market with rehab, perhaps, but not in A to B neighborhoods right now
"Landlord-friendly laws" - agreed
"Stronger rent-to-price ratios" - disagree; average ratio here is now down to around 0.5 to 0.7%
"Options for fully renovated or new-build SFRs and duplexes" - duplexes are non-existent in Huntsville compared to other cities
"Professional property management built in" - certainly may be true, but I do not know who you use for property mgmt here
If you haven't truly been investing in Huntsville over the past 2 years, things are now dramatically different. FYI
- 1yMelissa JusticeBusiness MemberRental Property Investor · Phoenix, AZ · Member since 2024 · 518 posts · 1k+ votesI always appreciate thoughtful dialogue, especially when it comes to helping out-of-state investors make informed decisions.
Quote from @Michael S.:
@Melissa Justice- I have no doubt you are very knowledgable about your own market in Detroit. That said, how much experience have you directly had recently in the Huntsville market? Your comments above suggest that you may have been active here several years ago. However, for the sake of OOS investors on BP not familiar with the market here, I'd like to make some comments to your statements above.
You recommended Huntsville for the following reasons, with my notations as follows:
"If your main goal is cash flow with fewer headaches" - actually, cash flow is non-existant currently for turnkey in Huntsville for A-C+ areas; off market with rehab, perhaps, but not in A to B neighborhoods right now
"Landlord-friendly laws" - agreed
"Stronger rent-to-price ratios" - disagree; average ratio here is now down to around 0.5 to 0.7%
"Options for fully renovated or new-build SFRs and duplexes" - duplexes are non-existent in Huntsville compared to other cities
"Professional property management built in" - certainly may be true, but I do not know who you use for property mgmt here
If you haven't truly been investing in Huntsville over the past 2 years, things are now dramatically different. FYI
To clarify, my original comment was more directed toward Birmingham and its surrounding metros, rather than Huntsville specifically. I work with investors across many landlord-friendly markets in the Midwest and Southeast, and with nearly 15 years of experience in the real estate industry, my role is to help clients evaluate which markets align with their individual investment goals, whether that’s cash flow, appreciation, or a mix of both.
You’re absolutely right that Huntsville has tightened in recent years - particularly in turnkey inventory and price-to-rent ratios, which are often closer to 0.5%–0.7% now. I still see value there in select situations, especially when long-term fundamentals are the focus.
That said, my comments were primarily highlighting Birmingham, where we’re seeing:
Steady job and population growth
Strong rental demand in B-class neighborhoods
Continued affordability compared to peer metros
Home value appreciation around 6.5% YoY (Zillow, Q1 2025), along with a relatively low cost of ownership due to Alabama’s low property taxes and landlord-friendly laws.
Additionally, in our space, especially with builder relationships offering seller incentives we’re often able to leverage concessions like rate buydowns to help create positive cash flow opportunities, even in today’s rate environment. Of course, this is always case-by-case and not a blanket solution for every deal, but when structured correctly, it does make a meaningful difference.
I work with vetted local teams in each market and always strive to pair investors with properties and partners that fit their goals and risk tolerance.
Appreciate the dialogue and always open to exchanging insights - collaboration in this space only makes us all better.
- Real Estate Broker · New York, NY · Member since 2020 · 2k+ posts · 1k+ votes1y
Hey, that's a cool plan you're thinking about! The BRRRR method can work really well in lower-cost markets like Detroit and St. Louis — but you'll definitely want to go in with eyes wide open.
Detroit and Highland Park, MI, offer super low entry prices, but you’ve got to watch for things like property taxes, city inspections, older housing stock needing major repairs, and sometimes rough tenant bases. It’s not uncommon there for a $50K duplex to need $60K+ in rehab. Make sure you’re budgeting fully — not just paint and flooring but mechanicals, roofs, windows, foundation, etc. Also, the appraisal comps on the back end can sometimes surprise people — just because you fix it up doesn’t always mean it will appraise as high as you hope.
Saint Louis, MO, has some really good BRRRR pockets, especially in north or south city, but it's very block-by-block. Some areas are investor goldmines; others you'll struggle to get stable tenants or reliable property management. Definitely lean on a good local agent or wholesaler who knows the neighborhoods inside out.
Springfield, MI (I assume you mean Springfield, Michigan near Battle Creek?) is a much smaller market, so liquidity and lender appetite might be lower, but you could still carve out small multifamily deals if you have boots on the ground.
For hard money lenders, you might check out Kiavi, Lima One, or local lenders like Civic or DLP Lending — but really, local investor meetups (look on BiggerPockets or local Facebook REI groups) can plug you into smaller private lenders too. Same goes for contractors and agents — you'll want local referrals, and ideally ones who have worked BRRRR deals before because they'll know how to help you keep costs under control.
- 1yDrew SygitBusiness MemberProperty Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
@Mohammed Rahman Curious as to why you labled DSCR lenders Kiavi, Lima One, Civic and DLP Lending, "hard money lenders"?
These lenders all offer long-term financing options.
Typically, hard money lenders are for short-term financing used for acquisition & repositioning, like a fix & flip, and are then replaced via a refinance.
Hard money lenders also charge relatively VERY high interest rates and corresponding points.
Logical Property Management4.9458 Reviews
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