Has anyone had an out of state BRRRR actually work in the last 2 years?

Question

I feel like 75% of my activity here is telling new investors that out of state flips or BRRRRs and buying an $80k house in an economically stagnant or depressed area is a bad idea. Somehow, in a market that is not forgiving at all, many seem to think that buying a heavy rehab in the rust belt will lead to the foundation of a solid portfolio and sustainable success. Maybe I'm the "Get off my lawn!" grumpy old guy, so I'll ask -

Has anyone actually made an out of state BRRRR work in the last two years that is relying on their local "team" of agents, contractors, PMs?

Stuart Udis · Answer

Many investors treat return of capital as success and BRRRR has morphed into doing the minimum repairs necessary to appease an appraiser and obtain the desired value. Major systems are left nearing the end of their useful life and while the home may looks nice with the new kitchen and newly tiled bathroom they are often a money pit with tons of deferred maintenance. If the homes were actually sold they wouldn't come close to realizing a sale price remotely close to the propped up appraisal once home inspections are completed. You can make the BRRRR work, but that doesn't necessarily translate to profitability just return of capital.

Samuel Diouf · Answer

Hey Travis, I've had quite a few clients complete successful BRRRRs and flips from OOS.

I think the most important thing is to have an actual understanding of the selected market. I also always suggest if you're more risk - averse to start with turnkey deals until you get a solid understanding of how OOS investing works and how your team operates... That way, you can see if you need to change anything before you jump into the higher risk projects.

I've also seen a lot of deals where the seller is a tried OOS investor who fell on their face because they jumped into the market blindly without the right preparation and connections.

Allie McAlister · Answer

Hey Travis — great question! I actually work with a lot out-of-state investors actively doing BRRRRs, and yes — they can still absolutely work, if you have the right local team in place.

In Memphis, for example, we still see solid cash-flow opportunities with lower entry points, but the key is partnering with a reliable contractor, property manager, and agent who understands the market and numbers on these deals. We may be seeing more partial BRRRRs in the market now, but these can pencil out well.

If you’d like, I can share a couple of examples of recent out-of-state clients who’ve BRRRR'd successfully here. It’s all about buying right and building a trustworthy local team.

Best of luck!

Adam Bartomeo · Answer

I just finished one - Purchased $250k, Rehab $50k, Appraised $365k. We got it rented for $2,100 which is a little below of where we would have liked it but rents will come back up.

Jake Baker · Answer

@Travis Timmons

We still use the BRRRR strategy in Jacksonville, FL. It is difficult to make things pencil, and I don't see it getting much better over the next 12 months.

I have changed my rental strategy to Co-Living (rent by the room). I don't use padsplit (weekly rentals); I rent on long-term leases in B Class neighborhoods. This plays into the affordability issues for tenants by allowing them to live in nicer neighborhoods for less money, yet I get monthly revenue comparable to short-term rentals.

Mike Dymski · Answer

There are lots of people who know other people who are doing it...

Nicholas L. · Answer

@Travis Timmons

hiya - just saw this.  i am in roughly the same boat as you in that, this seems to be why i am on BP at the moment.  have been able to message several new investors and get them away from the sales pitches.

i know folks have responded to this thread and said "yes"... but it depends on what your measure of success is.  you can buy any property and rehab it.  voila!  but that's not a successful BRRRR.

i'm working on one right now and my measures of success are going to be 1. 10K or less left in the deal and 2. break even on the rent.

Alex Bekeza · Answer

I just did one myself.

SFR in South City Saint Louis Missouri

$75k Purchase

$33k Renovation

$145,500 ARV appraisal (definitely some comp support for higher)

$1,500 market rent (listed but closed refi vacant)

I did not visit this property at all.  Totally relied on my local PM.

Elealeh Fulmaran · Answer

Keep your buy box tight – focus on light-to-medium rehabs in proven, landlord-friendly markets.

Vet your core four early – agent, PM, lender, contractor; test them on small jobs before scaling.

Underwrite with conservative numbers – realistic rents, padded expenses, and a contingency fund.

Verify everything – contractor bids with photos and line-item scopes; PM approval on rent before closing.

Stress-test your exit – ensure refi works at today’s rates and you’re not overlevered.

Run your “noise-to-numbers” scan – analyze 20 leads, pick 2 that pencil, and test your team on one light rehab before tackling heavy lifts.

Nate Herndon · Answer

Here's one we are refinancing currently for an Oklahoma City BRRRR investor. They purchased using a program that finances 100% of your purchase/rehab on paper, and takes a 15% deposit as cash-collateral that they hold until you refinance.

• $60k purchase

• $35k rehab

• $95k total rehab loan payoff

• 15% deposit = $14,250 "down payment"

• $126k ARV (confirmed via refinance appraisal, borrower expected this to be higher)

• 80% rate/term refinance ($100,800 loan) @ 6.75% [700-719 FICO]

• Applied $4k of deposit to payoff for an updated payoff amount of $91k

• Cover closing costs with 80% r/t refi + $2k back to borrower at closing (still considered a r/t refi if under $2k) + remaining $10,250 deposit reimbursed after payoff = $12,250 total back to borrower

• $4k of his deposit + closing costs for rehab loan = his "cash" in the deal

• $1,250 market rents

• Total PITI = $765.62

• DSCR = 1.6327

Has anyone had an out of state BRRRR actually work in the last 2 years?

Most Popular Reply