Out of State BRRRR Markets $80-100K ARV

11 Replies

After acquiring a couple of turnkey SFR's I have come to the realization that I need to transition to the BRRRR model in order to meet my goals. I have established a few criteria and would appreciate constructive feedback and connections to markets that meet the criteria. Financially, I will be bringing $30-40K cash and up to $30K available on a HELOC.

Act Fast Criteria:

  1. -Buy & Rehab for less than $60K and <70%ARV
  2. -Located in a market with direct flights from SLC for less than $200: Phoenix, AZ; Atlanta, GA; Reno, NV; Kansas City, KS; St Louis, MO; New Orleans, LA; Oklahoma City, OK; Tucson, AZ
  3. -Sum of GreatSchools Rating >9
  4. -Rent to Cost>2%
  5. -Low Crime in immediate and surrounding neighborhoods

Take a 2nd look criteria:

  1. -Buy & Rehab for less than $60K and <80%ARV
  2. -Sum of GreatSchools Rating 6-9
  3. -Rent to Cost >1%
  4. -Low Crime in the immediate neighborhood. Moderate in surrounding areas.

@Ben Crosby I don't know how realistic these goals are going to be.  Having ANY rentals in a "9" rated school zone with low crime in neighborhood and surrounding neighborhoods with $100k of value and a 2% rent rate would be unheard of....I mean, you would be lucky to just have ONE of those attributes in a rental property.  These are rental properties.  Not properties that you would target as your primary home.  Remember, people who rent....are ALREADY renting in some junky apartment in a terrible neighborhood (I'm exaggerating...but maybe not).  The fact they might be able to rent a reasonable home in that same neighborhood is a HUGE up-sell to that person.  There are plenty of hard working people that have jobs and that pay on time that need to rent a home.  Remember - rental properties.  So usually, a lower value rental property is a good choice.  But don't expect the school zone to be great and the crime rate to be low.  There are plenty of REALLY successful people that just invest in mobile homes (ever heard of Warren Buffett?) and those neighborhoods don't have such a great reputation either.  

The 2nd level of criteria you have is more realistic but again, I think just having ONE of those elements will be pretty good.  I hope this makes sense how I am describing it.

@Andrew Postell

Excellent feedback. My Turnkeys are in a suburb of Birmingham and meet most of the 2nd level criteria (elementary is a 3, middle & high school 1 each so not quite 6). The reason I am looking elsewhere for a BRRRR is the availability of a direct flight. My father is a recently retired tradesman and has offered to fly out to help with the rehabs/vet contractors etc...

The act fast criteria are definitely a Unicorn that you seize the minute you see it.

3. - Sum of GreatSchools Rating >9
5. - Low Crime in immediate and surrounding neighborhoods

You can cross off Indianapolis. It's not on your list but food for thought. That price point would be D class and lower income for sure and IPS (Indy Public School) zone. 

This is going to be a pretty hard stretch for OKC market as well. 

I see houses listed below 60k from time to time, but it's rare to see something that you could buy and rehab and still be under that price point. Also, the areas where the super cheap houses are located will be a tough stretch to get the great school ratings where you want them. 

I'm not saying it's not possible, but it's going to be difficult to buy and rehab for under 60k and still meet the rest of the other criteria. 

@Ben Crosby Crosby you've got to love to Delta Directs, right?  

You'll find several "take a 2nd look" homes in OKC, but if you did happen to find an Act Fast one here, it would likely be surrounded by a pile of people climbing over each other to get to it.  Lest you think I'm exaggerating, set up a Keyword Alert for OKC and Oklahoma City!

You'll certainly be able to build a fantastic portfolio with some combination of your two lists and I think you are thinking about the criteria from your Act Fast list . . . . if you see those first check to make sure it's not a scam, then act very quickly.

See Ute Later, Ben!

@Will Fraser

Thank you Will.

Excellent feedback from everyone so far. I asked for constructive feedback and so far my takeaways are:

1. Bring more money to the table. Simple solution, I will just have to partner, HML or wait a couple of months until I wrap up some other deals and have more liquid funds.

2. Lower the minimum standard for my better schools rating.

3. Better define standards for crime rating. What I con

How are folks objectively defining and measuring crime and accounting for it when investing long distance? Or, is it purely subjective based on local knowledge?

Do we have any active investors in St Louis? Most of the threads I have found are a little dated.

With the booming Reno market, I’m sorry to say you won’t find anything in that price range unless that’s what you’d use as a down payment. I’d be happy to discuss this market more if you’d like to connect.

Best of luck,