Need advice - Soon to be realtor and investor
Most Popular Reply
Stuart UdisPro Member
Attorney · Philadelphia · Member since 2018 · 2k+ posts · 3k+ votes@Ethan Ung Unfortunately it's not as easy to make money in real estate as your excel pro-forma may suggest. If you are buying for $70-$80K, more than likely the plumbing, electrical and HVAC need complete overhauls. In Philly, just the cost of all new MEP's with licensed subcontractors who can pull permits on a small house will cost you $28K. I wanted to point this out because you clearly have done your research and know the numbers that are looked at when cash out financing is sought, but many in your shoes go about the process completely wrong.
BRRRR has morphed into doing the minimum repairs necessary to appease an appraiser to obtain the desired value. Maybe you get away without replacing the knob and tube wiring or the systems that are at or near the end of their useful life and the home looks nice with the new kitchen and newly tiled bathroom. The tenant likes what they see, and moves in with the desired lease terms because of the homes appearance but the home is not really worth $200K.
If you were to list the home for sale instead of renting the home, a home inspector will call out all of the defects. Not to mention the most likely buyer for a $200K home in Philadelphia is an FHA buyer. Not only will you receive a repair addendum that will read like a novel, but expect the buyer to seek a 5-6% seller assist. Alternatively, if you do go down the BRRRR path and lease the home, once your tenant moves in, you will start fielding the maintenance calls immediately and most investors start with band aid fixes and quickly realize there's no cash flow and the equity the appraisal suggests is completely eaten up if they were to make all of the necessary repairs.This is the trap you want to avoid and is the exact playbook why so many get involved with the BRRRR process beleiving they are creating small fortunes that are never realized.
The other comment you made about there being a plethora of distressed properties in the area should serve as a red flag. Zero barrier/high inventory neighborhoods are not where you want to be investing.
31 Replies
- Investor · Toledo-MetroDetroit-Dallas · Member since 2022 · 122 posts · 71 votes1y
BRRRR can definitely work, but just be careful with projected rehab numbers, surprises can add up fast once you get inside the property. $100k in and $200k ARV seems way too good to be true IMO
If you're open to other markets, you might also look at Midwest cities like Toledo or Detroit, where purchase prices and rehab costs are lower, and deals that hit the 1% rule are still pretty common. You can build solid cash flow and get BRRRR-style equity gains without as much upfront risk or any work needed really. I'm talking $100k turnkey SFH rented at $1000/month in a good area!
I invest in those markets myself and help others do the same, so happy to share what’s worked and what to watch out for if you’re curious about comparing the numbers.
@Account Closed,
Thank you for the advice Mr. Sidd, I will keep your suggestion for the midwest cities in mind. For now I'm strictly sticking with the city that I know. You are correct though that the projected rehabs are almost never accurate until we get it done. The ARV from what I've seen on the MLS in the Strawberry Mansion neighborhood that are similar to the property I based my Pro Forma on seems to be accurate from what I've seen, but I could very well be doing it completely wrong running comps.
- Specialist · Member since 2025 · 483 posts · 270 votes1y
Great start and solid savings. For BRRRR in Strawberry Mansion, verify everything on the ground: walk comps, confirm ARV with a local investor-friendly agent, and get a GC to scope roof, foundation, plumbing, and electrical since photos lie. Keep first rehabs light, pad your budget with contingency, and aim to be all-in around three-quarters of conservative ARV so the refi works. Stress test rents with a PM, run numbers at higher rates and taxes, and avoid unpermitted work. Analyze 50+ deals fast, make offers on the few that fit your buy box, and let deal one be a proof of concept, not a grand slam.
Thank you Ms. Fulmaran, your response is jam packed with advice that is incredibly helpful. You're correct on all points that I should be running my numbers with local experts, getting an inspector/GC to ensure the quality of the house and run the estimates on the rehab, etc. It is really reassuring to hear someone affirm the things that I was thinking about doing. I believe the underlying truth is that mastering the fundamentals will give you the best chances for success.
- 1yAdrian Lammersdorf-SciollBusiness MemberRealtor · FL · Member since 2020 · 234 posts · 101 votes
Judging from your post, it sounds like you know your number and are ready. Also congrats on being so young and having 130k in savings. That is not an easy thing to do at your age. Trust your numbers, and don’t over analyze, you will lose the good deals if you take too long. Definitely consider getting a realtor to help you for help if you need, most states have the seller paying them anyways. Best of luck
Thomas Lynne Realty527 ReviewsThank you Mr. Lammersdorf-Scioll, I appreciate your kind words. I'll definitely get a realtor and other local teams/experts to help me out on my journey.
- Investor · Chattanooga, TN · Member since 2023 · 179 posts · 110 votes1y
Ethan 🙌 first off, huge respect. At 22, sitting on savings and zero living expenses is an incredible launch pad. Pairing that with a real estate license and BRRRR mindset gives you tools most people twice your age are still chasing.
A couple thoughts:
- Pictures lie (you already know this) — Zillow won’t tell you about plumbing, electric, structural surprises, or city permitting challenges. Walkthroughs and trusted local eyes are critical before running numbers too tight.
- Philadelphia markets like Strawberry Mansion can deliver great returns, but they also come with nuance — neighborhood pockets shift quickly, and comps don’t always tell the full story. If you don’t have boots on the ground you trust, partner with someone local.
- Your pro forma is smart — but I'd run conservative numbers with higher rehab and lower rent assumptions, especially on your first BRRRR. A buffer is not wasted profit; it's the margin that saves your deal.
- Most importantly: don't let the excitement blind you. You're not just chasing ROI — you're laying the first brick of your legacy. Make it a solid one, even if it takes longer to place. 🌱
Cheering for you, man. Your discipline at 22 is already setting you apart.
— Joshua Hardin | Renewed Legacy Group
Army Veteran | Chattanooga, TNI would like to thank you for your response and service Mr. Hardin. You're exactly right that the pictures lie. It's necessary to connect with local teams that'll help me along my journey such as general contractors, inspectors, lenders, etc. I will definitely run more conservative numbers to ensure that I can handle an economic downturn or higher rates or higher rehab or lower rents. I appreciate your words of encouragement, it is not displaced.
- Lender · Cary, NC · Member since 2021 · 122 posts · 29 votes1y
Hi Ethan,
I am with The One Brokerage and am happy to run numbers for you on the refinance side of things if you ever need. David Greene and Christian Bachelder created our brokerage, and we have access to hundreds of lenders for all kinds of real estate deals. I can do conventional/FHA loans too, if you decide to house hack or get your own place. I will message you the quick numbers I ran for a DSCR cash out on this scenario. It would be great to connect and you can reach out anytime.
Cheers! Kate
Thank you for providing me the opportunity Ms. Taylor. I would definitely be interested to run the numbers by you.
- 1yStuart UdisPro MemberAttorney · Philadelphia · Member since 2018 · 2k+ posts · 3k+ votes
@Ethan Ung Unfortunately it's not as easy to make money in real estate as your excel pro-forma may suggest. If you are buying for $70-$80K, more than likely the plumbing, electrical and HVAC need complete overhauls. In Philly, just the cost of all new MEP's with licensed subcontractors who can pull permits on a small house will cost you $28K. I wanted to point this out because you clearly have done your research and know the numbers that are looked at when cash out financing is sought, but many in your shoes go about the process completely wrong.
BRRRR has morphed into doing the minimum repairs necessary to appease an appraiser to obtain the desired value. Maybe you get away without replacing the knob and tube wiring or the systems that are at or near the end of their useful life and the home looks nice with the new kitchen and newly tiled bathroom. The tenant likes what they see, and moves in with the desired lease terms because of the homes appearance but the home is not really worth $200K.
If you were to list the home for sale instead of renting the home, a home inspector will call out all of the defects. Not to mention the most likely buyer for a $200K home in Philadelphia is an FHA buyer. Not only will you receive a repair addendum that will read like a novel, but expect the buyer to seek a 5-6% seller assist. Alternatively, if you do go down the BRRRR path and lease the home, once your tenant moves in, you will start fielding the maintenance calls immediately and most investors start with band aid fixes and quickly realize there's no cash flow and the equity the appraisal suggests is completely eaten up if they were to make all of the necessary repairs.This is the trap you want to avoid and is the exact playbook why so many get involved with the BRRRR process beleiving they are creating small fortunes that are never realized.
The other comment you made about there being a plethora of distressed properties in the area should serve as a red flag. Zero barrier/high inventory neighborhoods are not where you want to be investing.
Mr. Udis, I really appreciate you giving me the hard and necessary warning. I genuinely appreciate you sharing your local expertise and highlighting the common traps for new investors. My strategy is to perform thorough due diligence on every property, using a detailed inspector's report and multiple GC quotes to ensure that I'm only finding deals that do not require bare bones rehab. Concerning your point about the Strawberry Mansion market, my data points to it being a path of progress area, specifically due to rising property values (16.6% median sale price increase year-over-year and numbers of sold homes doubled), decreasing crime rates (homicides down 15%), gentrification (I've seen personally), and investment spillover from Brewery Town.
- Real Estate Agent · Kansas City · Member since 2018 · 4k+ posts · 3k+ votes1y
Agree with @Stuart Udis. A 70-80K purchase, 28K rehab and a 200K ARV is very unlikely. Yes it is out there. Those rehabs grow quickly. If there is plenty of rundown houses what kind of area is it? What would you grade it? There could be growth but crime can still be an issue. We see it here in KC. Area is gentrifying but you have to deal with petty crime and theft. Eats into margins and it's a pain. I would network with GCs and start getting an idea on cost. Might take paying them but it's worth it.
- 1yMatthew Irish-JonesBusiness MemberReal Estate Agent · Buffalo, NY · Member since 2017 · 2k+ posts · 2k+ votes
My advice is DO NOT start your career with a BRRR.
Irish Jones Realty4.947 Reviews - 1yFrankie VozziBusiness MemberMember since 2025 · 347 posts · 88 votes
Hey Ethan, sounds like you're off to a strong start great to see you thinking strategically about the BRRRR approach. The Philly market has a ton of potential if you structure the financing right from the start. I work with a lot of first-time investors in PA setting up DSCR and rehab loans to get projects moving smoothly. I sent you a Dm, happy to connect!
- 1yStuart UdisPro MemberAttorney · Philadelphia · Member since 2018 · 2k+ posts · 3k+ votes
@Ethan Ung The $70k-$80K property that requires $28K of reno and is truly worth $200K is like finding a needle in a haystack. Thorough diligence, home inspections & multiple GC bids sound great but if you find that needle you likely won't have time to undertake those steps. The $70k needles you are targeting rarely afford the luxury of thorough due diligence. There are always exceptions but the most realistic scenario if you find one of those needles is the ability to do a walk-through and close quickly because there are hundreds of buyers looking for the same deal in Philadelphia all willing to move quick.
Consider purchasing an FHA property where you can take advantage of the favorable financing terms and have more leverage when negotiating due diligence terms. This is particularly important on your first purchases. You also have the ability to buy far better real estate than chasing the BRRRR property hoping to cash flow $200/m. You will come out ahead purchasing well using FHA financing in an established neighborhood.
- Rental Property Investor · Philadelphia, PA · Member since 2015 · 480 posts · 362 votes1y
@Stuart Udis has pretty much told you everything you need to be aware of. Its truly admirable that you are starting this journey at such a young age and clearly you learned a lot already. But Stuart is telling you the stuff the gurus, BRRR pundits, lenders etc are not teaching - the reality on the ground. Your numbers are not going to pan out. I urge early investors to get some guidance from seasoned investors and to pay for some good coaching. I see too many newer investors end up with bottomless pits in tough cities like Philly. One bad tenant or unexpected capital expense could ruin you. Do you know how hard it is to evict in Philly? How much a major repair could cost? if you are able to get an experienced mentor and willing to pay a truly good contractor to work with you on scoping some properties, you can jump the learning curve and avoid some really painful mistakes AND learn.
- Investor · Get yourself trained before doing something inadvisable. · Member since 2024 · 3k+ posts · 1k+ votes1yHmm, do you want to be a landlord, or do you want to be rich? Sometimes you hold 'em, sometimes you flip them. Do you know which is which? What's your degree in? It gives a clue what you're interest is in. And what you need to focus on in order to be successful?
Quote from @Ethan Ung:
I'm a fresh out of college 22 year old who has about 130k in savings and zero living expenses due to parents. I'm going to become a real estate agent soon and in the same stride I'll be trying out the BRRRR strategy. My main focus has been the Strawberry Mansion area due to a plethora of distressed properties that look like they need relatively high ROI rehabs; paint, new flooring, kitchen, bath, etc. but not too distressed where there is a need to do a full-gut, at least that's what I can see from the pictures on Zillow (I know it's not too reliable). The Pro Forma for the deals I saw was a purchase price of $70-80k, estimated rehab of $28k (strictly using the pictures so this could vary wildly), ARV of $200k, max DSCR loan of 132k based on a 1.20 DSCR, gross anual rent $21k, NOI $13.29k, and a net annual cash flow of $2,215. I was wondering if I could get any advice from people who've done the BRRRR and investors in the Strawberry Mansion area.
- Severna Park, MD · Member since 2013 · 7k+ posts · 7k+ votes1y
Well you are not going to get any GCs to run around with you giving you prices on a house you dont own . Ans $28,000 doesnt get you much on a rehab on a 70K house . If you find property thats not on the MLS you may find that needle in a haystack , but you have to buy it right away , and pay cash . If not the hundreds of other buyers will .
PS , If you do find a deal and get a GC to come out and look at it , he may just as well give you prices so high you wont buy it . And then he will go and buy it .
As a contractor I will tell you this it ALMOST ALWAYS cots MORE to do a rehab than the original estimate . Once you open things up the problems show themselves .
- 1yJoseph TadresPro MemberReal Estate Agent · Columbus, OH · Member since 2025 · 184 posts · 179 votes
Hey Ethan, great work on saving, and congrats on graduating from college. I bought my first property at 22, six months after graduating from college. I recommend doing a house hack/brrr, that's what I did.
- 1yAlan AsriantsBusiness MemberReal Estate Agent · Philadelphia, PA · Member since 2019 · 1k+ posts · 1k+ votes
Hey Ethan,
Welcome to the community — and amazing job getting yourself into the financial position you’re in today. As many have mentioned in this post (especially Stuart), start with a house hack or primary residence using low money down. This is the best strategy for anyone looking to get started. It allows you to take minimal risk, leverage your finances, and buy in a solid location — which is the most important thing in real estate. You’ll also get the best rates possible and benefit from slow, steady growth.
It’s completely normal to get excited by the idea of big returns and dreams of driving a 911 GT3 RS while your tenants pay your bills. All of those things are possible and attainable — but like anything worthwhile, they take time, patience, and experience.
Stuart, myself, and many others have already done the research, failed, and experimented with those “high-return” property types for you. We took that journey to learn — and to tell you firsthand — that they don’t work the way you might think they will.
Buying the right home in a solid location is the best advice anyone can give you. If someone tells you otherwise, turn the other way.
Buying the right home in the right location means predictable growth and appreciation, higher-quality tenants, better resale value and liquidity, and stronger market absorption. The value of owning three to four solid, paid-off properties in 30 years is incredibly underrated by most people.
The key to house hacking is making sure you buy something solid — not a money pit — that covers your expenses. Over time, rents will rise, you’ll have opportunities to refinance and lower payments, appreciation will grow, and so on. In 10–15 years, you’ll look back at everyone who tried those “get rich quick” strategies and think, “Good thing I didn’t do that.”
So many people I know chase high returns only to burn out and give up on real estate entirely a couple of years later. Don’t be that guy. Remember — good things take time.
Reach out anytime if you want to connect. I’m happy to help with your agent journey or your home search.
Alan Asriants - New Century Real Estate 591 Reviews - 1yJames JonesPro MemberInvestor · Collierville, TN 38017 · Member since 2017 · 734 posts · 542 votes
You're in an amazing position, Ethan low living expenses and $130K saved gives you a massive head start most people don't have. I'd approach this first deal less about maximizing ROI and more about building your systems and confidence through the full BRRRR cycle.
If you're eyeing Strawberry Mansion, just be careful with your exit assumptions, appraisals and DSCR underwriting can come in conservative in certain ZIPs. Run the deal twice: once with your numbers, and once assuming a 10–15% drop in ARV and a slower lease-up. If it still works, that's your green light.
Also, don’t sleep on partnering with local investors already active in that pocket. You can bring your cash or sweat equity while they bring lending relationships and contractors. That’ll help you avoid beginner mistakes and shorten your learning curve fast.
@James Jones
Thank you Mr. Jones, I took your advice to heart and reran the numbers, specifically on the ARV. According to my Pro Forma, it seems as though I can get away with even having an ARV of 164k. So, even if my numbers of the ARV being around 230k is inflated and completely wrong, I'll be fine. Also, I never thought about partnering with local investors, I'll probably go to some REIAs such as DIG in order to connect with them. Do you reckon they would take a young investor like me under their wing?@Alan Asriants
Hello Mr. Asriants,
Thank you for taking time to write such a thoughtful and detailed response. I genuinely appreciate you sharing your perspective as an experience professional here in Philadelphia.
Your advice to house hack a solid property in an establish neighborhood is my long-term goal (2 years). The challenge I'm currently facing is that if I were to leave my parent's home, I would have to start paying personal expenses (groceries, etc.).
I completely understand the risk averse strategy to slowly build equity in establish markets, and the philosophy of "good things take time." As it is now though, I'm going to be extremely careful and picky when it comes to deals to BRRRR.
Again, I appreciate your advice. I'd be happy to connect.- Investor · Get yourself trained before doing something inadvisable. · Member since 2024 · 3k+ posts · 1k+ votes11mo
Quote from @Ethan Ung:
@Alan Asriants
Hello Mr. Asriants,
Thank you for taking time to write such a thoughtful and detailed response. I genuinely appreciate you sharing your perspective as an experience professional here in Philadelphia.
Your advice to house hack a solid property in an establish neighborhood is my long-term goal (2 years). The challenge I'm currently facing is that if I were to leave my parent's home, I would have to start paying personal expenses (groceries, etc.).
I completely understand the risk averse strategy to slowly build equity in establish markets, and the philosophy of "good things take time." As it is now though, I'm going to be extremely careful and picky when it comes to deals to BRRRR.
Again, I appreciate your advice. I'd be happy to connect.Your Comment "The challenge I'm currently facing is that if I were to leave my parent's home, I would have to start paying personal expenses (groceries, etc.)."
Yes, that is what grownups do. I paid all my expenses from when I moved out at 18 years old coming from a poor background. I paid my own way through private college ( which was not cheap) and all of my advanced studies. So what, that doesn't make me anything, . . . but growing up did. Completely get that Ken M.
It's just that I was identifying my no expenses as a financially superior way to get ahead of the curve, as well as being able to take care of my parents by physical proximity. I live in a traditional Chinese household and it is common for their kids to stay with them for the rest of their lives, especially when my father is getting old and he's incredibly sick. I can't afford to move out for the sake of moving out and being a "grownup."
- Investor · Get yourself trained before doing something inadvisable. · Member since 2024 · 3k+ posts · 1k+ votes11mo
Quote from @Ethan Ung:
Completely get that Ken M.
It's just that I was identifying my no expenses as a financially superior way to get ahead of the curve, as well as being able to take care of my parents by physical proximity. I live in a traditional Chinese household and it is common for their kids to stay with them for the rest of their lives, especially when my father is getting old and he's incredibly sick. I can't afford to move out for the sake of moving out and being a "grownup."
I totally understand. Taking care of family is far more important than material gain, in my opinion.
However, investing is material gain. Lenders are material people. They expect certain behaviors and won't lend otherwise. If you come to the point where you need extra financing, perhaps borrowing from a rich uncle is your solution or maybe creative finance. Just don't expect typical investors and lenders to be sympathetic to your life choices. Work around them and carry on.
@Joseph Tadres
Helo Mr. Tadres,
That's amazing, did you have two years of work history before you did the house hack?- 11moJoseph TadresPro MemberReal Estate Agent · Columbus, OH · Member since 2025 · 184 posts · 179 votes
Hey Ethan, I did have two years of work history. It was only part-time, though.
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