Completing a BRRRR in C or D neighborhoods

Member since 2025 · 4 posts · 8 votes

I'm in Rochester, NY and I'm searching for my first deal. I want to do a BRRRR, but with the funds available the only homes I can buy with cash and rehab are in C or D neighborhoods. Since the neighborhood isn't the best, I'm concerned the value of the home won't go up over the years as it would in a better neighborhood.

Does anyone have experience doing BRRRR's in C or D neighborhoods that can give some advice? Thanks!

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Jaron WallingPro Member

Rental Property Investor · Indianapolis, IN · Member since 2018 · 4k+ posts · 4k+ votes

@Salvatore Amato Best advice I will give; unless you have experience (you have none) don't buy in D class neighborhoods. It's challenging and ROI isn't there unless you scale quick (for CF) which brings a ton of risk when you're new. Focus on average C/B class properties, light cosmetic rehab, BRRRR, or house-hack opportunities.

Unless you have a market advantage (piles of cash, network, contractor support) nothing else matters. Find fringe neighborhoods moving from C < B class and start walking properties.

Everyone has a REI path. Find your path and start walking!! I bought my first house in C/C+ class neighborhood. People said it was risky, sketchy, "a bad idea", "rentals are hard", and guess what? I have zero regrets other than scaling faster, actually flipping properties when rates were low, getting involved with meet-ups, networking, and leveraging more contractors to speed up my rehabs.

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Jaron WallingPro Member
Rental Property Investor · Indianapolis, IN · Member since 2018 · 4k+ posts · 4k+ votes
1y
@Salvatore Amato Best advice I will give; unless you have experience (you have none) don't buy in D class neighborhoods. It's challenging and ROI isn't there unless you scale quick (for CF) which brings a ton of risk when you're new. Focus on average C/B class properties, light cosmetic rehab, BRRRR, or house-hack opportunities.

Unless you have a market advantage (piles of cash, network, contractor support) nothing else matters. Find fringe neighborhoods moving from C < B class and start walking properties.

Everyone has a REI path. Find your path and start walking!! I bought my first house in C/C+ class neighborhood. People said it was risky, sketchy, "a bad idea", "rentals are hard", and guess what? I have zero regrets other than scaling faster, actually flipping properties when rates were low, getting involved with meet-ups, networking, and leveraging more contractors to speed up my rehabs.
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Caleb Brown
Real Estate Agent · Kansas City · Member since 2018 · 4k+ posts · 3k+ votes
1y
As Jaron said avoid D areas. On paper they look fine but the high turnover, constant make ready rehabs and the risk of evictions/break ins kill anything. They also have low or no appreciation. I would at least do C area. If you have to save more do that. It's better to buy the right property which might take longer compared to buying anything and not being able to scale past that one.
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Andrew PostellPro Member
Lender · Fort Worth, TX · Member since 2016 · 8k+ posts · 6k+ votes
1y
@Salvatore Amato I mean, you are correct (and so are the posts above) that better neighborhoods would appreciate more. But what choice do you have? If your can't go one route, and only have the choice of doing this other route - I mean, then you don't have any choice. My first BRRRR Property was a $7,000 home. That's all I could do. My 2nd BRRRR was a $23,000 home. That's all I could do. Now, I don't own any of those homes anymore...but I couldn't be where I am without starting down there. There's plenty of people who do make money on lower valued homes. There's people who make money on mobile homes. There are certainly challenges with ANY strategy. The main challenge to just about any of us is money. Even if you have $1million...your limit is just higher than mine - it's still a limit though. Work within your means. That's usually a pretty safe practice.
Reach out with any questions. Here to help!
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Arman AhmedPro Member
Real Estate Agent · Columbus Cleveland Dayton, OH · Member since 2024 · 2k+ posts · 924 votes
1y
@Salvatore Amato
Hey Salvatore, doing a BRRRR in C or D neighborhoods can work, but you have to be extra careful. Focus on properties with strong rental demand and low vacancy, and run very conservative numbers for rent, ARV, and rehab. Even small miscalculations can eat into cash flow, especially in lower-tier neighborhoods. If you're open to exploring opportunities in the Midwest, there are some markets where you can get below-market deals with strong cash flow and less risk—definitely worth considering if you want a safer path to building your portfolio.

[email protected]614-418-6081
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Jules Aton
MD/DC · Member since 2024 · 1k+ posts · 1k+ votes
1y
I’m still a believer in the location, location, location thing. I lived below my means, worked 2 jobs and waited until I had enough cash for a down payment on a house in need of reno in an excellent neighborhood.
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James JonesPro Member
Investor · Collierville, TN 38017 · Member since 2017 · 612 posts · 452 votes
1y
BRRRR in C or D neighborhoods is all about strategy. Appreciation won't be your driver, cash flow will. If the numbers work with rents covering your debt and leaving buffer, you've got a deal. Section 8 can be your best friend in these areas: steady rent direct from the government. Just screen tenants hard and keep reserves for maintenance. Cash flow beats comps.
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Sultan Ali
Wholesaler · Irvington, NJ · Member since 2025 · 112 posts · 53 votes
1y
Great question, Salvatore. BRRRRs in C or D neighborhoods can work, but the risks are definitely different than in stronger areas. Cash flow might look better on paper, but appreciation and tenant stability can be tougher. A lot of investors make it work by being very conservative with rehab numbers, screening tenants carefully, and planning to hold long term. If your main goal is cash flow, it could still be worth it but if you’re banking on appreciation, you may want to be cautious.
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Salvatore Amato
OP
Member since 2025 · 4 posts · 8 votes
1y
I greatly appreciate all of the responses. You've given me something to think about as I continue to learn more about this. Thank you!
2 Reply
Carini Rochester
Investor · Rochester, NY · Member since 2016 · 576 posts · 358 votes
1y
I have been where you are and I've tried what you are describing. I bought a fixer-upper (in 2016) in a C neighborhood in Rochester, NY (Portland and Norton area, on a side street.) Purchased for $20,000, put about $20,000 into it. The bank appraised it (improved, rented, stabilized) at $28,000. It wouldn't BRRRR. No refinance. No repeat. I am certain the appraisal was low. I think I could have put it on the market and gotten in the 50's. After owning it for six years I sold it for $100,000. So, my experience tells me that the after repair appraisal is the weak link in BRRR in C and D neighborhoods. Talk to your lender. Try to get a good understanding of appraised values in the area you are looking. Different lenders and different appraisers may have different opinions on city neighborhoods. Discrimination by banks and by appraisers is real, I think.
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Dan H.Pro Member
Investor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
1y
I have done successful (full extract of investment and cash flowing after refinanced) BRRRRs in areas that I would rate class C-. In my market class c- areas have appreciation that exceeds most markets class A areas. You would think I am advocating this approach but I am not.
On my list of things I would do different if starting over way back when I started #1) buy more properties. Good investments were easy to find. At times I was slightly stretched financially, but most of the time I could have bought one more. Every property I offered on would have been a good investment. #2) stretch a bit further to purchase in the best location possible.
What defines the best brrrr market? To me it is the property where the value add adds the most value per cost, effort, and risk. The entire return and the scaling relies on the value add. Extracting the complete investment amount requires a significant adding of value. Owning a property without trapping any investment dollars into it makes for theoretical infinite return (not really because money was typically trapped in the property for a short period of time, but a very high level of return) and allows immediate opportunity for that final R (Repeat).
A little over a year ago I completed my most over budget rehab ever and it was not close. To be blunt, I was cocky and never expected to go so far over my projected budget. There were a lot of reasons for missing my budget estimate. However it was in a costly area. The PSF of rehabbed unit was over $2k. Adding a half bathroom out of existing space added $50k of value per the comps. This is the desired target brrrr market. Spend $5k to $7k to add a half bathroom and add $50k in value. Heck it is like printing money.
The brrrr in c- area
- adds far less value than doing the brrrr in a high class (high PSF) market. This makes it more challenging to extract all the investment, which makes it harder to scale. It also means I made less money for my effort.
- when I rent in a class c- area I typically get worse tenants than a class b+/a- area. This implies more tenant drama, more delinquent rents, more evictions, higher maintenance/cap ex costs, longer vacancies, and more costly tenant flips. In summary, it means more effort. More effort is a hindrance to scaling. Each of us has a capacity. That capacity may be dictated by family, w2, mindset, etc. Two easy tenants versus one difficult tenant, I take the two easy tenants every time. Better tenants allows me to have more units, do more brrrrs, find more deals, etc.
My suggestion is to avoid class c/d areas. You cannot change the area (at least not without a lot of capital).
Good luck
2 Reply
Aqil Dharamsey
Rental Property Investor · Rochester, NY · Member since 2016 · 303 posts · 154 votes
1y
@Salvatore Amato I am in Rochester and have done several BRRR and it works! Yes the banks won't appraise it to the limit you desire but the cash flow will is amazing and after holding it for over 2 years and having some rental revenue on it, the banks will tend to lend against it.
It’s challenging to do rehabs in this market/neighborhood because of break-ins, reliable contractors, and tougher city inspectors, but with proper vision and goal this can be managed.
Good luck and keep pushing. Start small and test the waters.
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- Jody Lee
  Member since 2017 · 3 posts · 1 vote
  1y
  Quote from @Aqil Dharamsey:
  
  @Salvatore Amato I am in Rochester and have done several BRRR and it works! Yes the banks won't appraise it to the limit you desire but the cash flow will is amazing and after holding it for over 2 years and having some rental revenue on it, the banks will tend to lend against it.
  It’s challenging to do rehabs in this market/neighborhood because of break-ins, reliable contractors, and tougher city inspectors, but with proper vision and goal this can be managed.
  Good luck and keep pushing. Start small and test the waters.
  Do you know of any reliable contractors that you would recommend. I'm also looking to get started in the Rochester area.
  0 Reply
- Preston Garcia
  Real Estate Agent · Rochester, NY · Member since 2020 · 148 posts · 28 votes
  1y
  Quote from @Jody Lee:
  
  Quote from @Aqil Dharamsey:
  
  @Salvatore Amato I am in Rochester and have done several BRRR and it works! Yes the banks won't appraise it to the limit you desire but the cash flow will is amazing and after holding it for over 2 years and having some rental revenue on it, the banks will tend to lend against it.
  It’s challenging to do rehabs in this market/neighborhood because of break-ins, reliable contractors, and tougher city inspectors, but with proper vision and goal this can be managed.
  Good luck and keep pushing. Start small and test the waters.
  Do you know of any reliable contractors that you would recommend. I'm also looking to get started in the Rochester area.
  
  Hi Jody, I do!
  
  0 Reply
Preston Garcia
Real Estate Agent · Rochester, NY · Member since 2020 · 148 posts · 28 votes
1y
@Salvatore Amato Hey Sal, I hope all is well! I tried to text you the other day (maybe I got the wrong number). Feel free to reach out and we can discuss more in depth🤙🏼
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- Bridget BrickBusiness Member
  Lender · Direct-to-Wholesale DSCR Loans | BRRRR & No-Seasoning Refi | 46 States · Member since 2025 · 53 posts · 11 votes
  1y
  Quote from @Preston Garcia:
  
  @Salvatore Amato Hey Sal, I hope all is well! I tried to text you the other day (maybe I got the wrong number). Feel free to reach out and we can discuss more in depth🤙🏼
  
  Preston I have a lead for you, I have a borrower who's realtor will only allow him to use their preferred lenders. We've lost 2 deals because of it. Please let me know the best way to connect you.
  [email protected]619-993-0504
  Get Brick Capital
  Website View Page
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Alex BekezaBusiness Member
Lender · Los Angeles, CA · Member since 2018 · 2k+ posts · 1k+ votes
1y
People do BRRRRs in C/D neighborhoods successfully, but it’s usually a cash flow play, not appreciation. If your goal is to recycle cash quickly, they can work but expect higher management/turnover risk.
Personally I've done 10 BRRRRs in what I'd call a C area but the low barrier to entry, high rent to price ratio, reliable lending, and working with the right property management team has turned it into a pretty scalable process for me.
[email protected]818-606-8823
Investor Property Loan5306 Reviews
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Bridget BrickBusiness Member
Lender · Direct-to-Wholesale DSCR Loans | BRRRR & No-Seasoning Refi | 46 States · Member since 2025 · 53 posts · 11 votes
1y
Salvatore, as a new investor, lenders will be able to give you an 80-85% loan on purchase price and likely find the entire renovation. Some numbers to keep in mind, you can only borrow up to 65% LTV of the new ARV. So if the new value is going to be $150,000, you can only borrow $97,500 for both the purchase price and renovations.

So the main number to keep in mind is always the ARV, and work your way backwards. Once you have 3 under your belt, you can borrow up to 75% LTV of the new ARV.
[email protected]619-993-0504
Get Brick Capital
Website View Page
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Kayla ThorpBusiness Member
Member since 2024 · 5 posts · 4 votes
11mo
Quote from @Salvatore Amato:

I'm in Rochester, NY and I'm searching for my first deal. I want to do a BRRRR, but with the funds available the only homes I can buy with cash and rehab are in C or D neighborhoods. Since the neighborhood isn't the best, I'm concerned the value of the home won't go up over the years as it would in a better neighborhood.

Does anyone have experience doing BRRRR's in C or D neighborhoods that can give some advice? Thanks!

Hey, I think I spoke with you earlier today.
There are sweet spots in the C(+) neighborhoods that do really well for people in Rochester, the C and D neighborhoods are extremely tough, city regulations just pile on in those areas and it can be tough to operate well and stay in the black. The key is getting your team in place. Partner with a realtor that focuses on investment property, a contractor you can trust that comes on referral from other investors, and a property manager who manages the type of property you're looking to buy, that can give you a second opinion on things. The suburbs are a solid option also, watch the property taxes though as a property in the suburbs that is the same price as one in the city can have much higher taxes which will change the numbers for your cash flow. Good luck!
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Salvatore Amato
OP
Member since 2025 · 4 posts · 8 votes
11mo
Hi Kayla! Yes it was me you spoke with
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