Possible BRRRR property?

Question

Hello,

I've bought a class D property in Oklahoma via a tax lien auction for $6,000. This is my first property in my portfolio and want to use the BRRRR strategy to start acquiring more properties. The biggest problem I am running into right now is finding out what the ARV of this property will be. I've used online sources such as Zillow and Redfin to find a possible source of the ARV but think the numbers are too high at $77,000.

Also, could someone provide an old thread/book recommendation of the functions and benefits using a LLC during BRRRR or long term buy and hold deals.

Ashish Acharya · Answer

Percy, at a $6K purchase price I’d be very careful not to let the low entry cost make the deal look safer than it is.

For the ARV, I would ignore Zillow and Redfin as the deciding factor and build it from recent sold comps that are actually similar in size, condition, bedroom count, and neighborhood. With a class D property, a few blocks can make a major difference, so I’d rather have three strong comps I can defend than a broad automated estimate.

Before putting much rehab money in, I’d also verify the title, taxes, liens, utilities, code issues, insurance, and what a lender would realistically refinance after the work is complete. For a BRRRR, the refinance is what determines how much capital you actually get back, so I’d underwrite a lower appraisal and higher rehab budget before moving forward.

Since the end goal is a rental, I’d also evaluate cost segregation once the property is placed in service. It may accelerate depreciation on qualifying components, but the important question is whether the resulting losses are actually usable under the passive-loss rules. The IRS notes that rental losses can be limited by passive-activity and at-risk rules.

I’d rather be conservative on ARV now than discover after the rehab that the refinance does not return the capital you expected.

Happy to connect!

Divin Kanyama · Answer

@Percy Miller, Congrats on getting your first property. With a Class D property purchased through a tax lien auction, I’d be very careful relying on Zillow or Redfin for ARV, especially if the property needs work or the nearby sales are not truly comparable.

I’d start by pulling actual sold comps within the same neighborhood, similar property type, size, condition, and preferably within the last 3–6 months. If there are not enough good comps, I’d talk to a local investor-friendly realtor, appraiser, or hard money lender who knows that Oklahoma submarket. Lenders can be especially helpful because they will usually tell you what value they would actually lend against, which is more useful for BRRRR than an online estimate.

For BRRRR, I’d also make sure the ARV supports the full plan: purchase price, rehab, holding costs, refinance value, rent, vacancy, repairs, management, taxes, insurance, and whether the property will actually cash flow after the refinance. Cheap properties can look great upfront but get expensive quickly if the area, tenant base, or repair scope is challenging.

On the LLC question, an LLC can be useful for liability protection, separating business activity, and keeping your rentals organized, but it does not replace proper insurance, bookkeeping, or tax planning. I’d talk with a CPA and attorney before transferring or acquiring property in an LLC, especially if financing or refinancing is involved.

Nicholas Alexander Guerrero · Answer

@Percy Miller

I’d be very careful about treating Zillow/Redfin as the ARV here, especially with a low-basis Class D property. I’d want to separate three questions: what genuinely comparable renovated properties have sold for, what scope would actually get this property to that condition, and whether the neighborhood supports that level of renovation. Have you already put together your expected rehab scope/cost and pulled actual sold comps rather than automated estimates?

Jaron Walling · Answer

@Percy Miller We use our LLC to do both separate expenses, and to limit liability.

The reason you want to purchase or refinance in your personal name is because financing is usually .75-1% cheaper if not more. Current interest rates/pricing is making BRRRR deals really hard to pull off without leaving $$$ in the deal.

"The house has around 1,800 square feet on a street that averages 1,000 square feet" - This is a good and a bad thing. Just because a house is larger doesn't mean it will command a higher ARV. You'll also have more materials costs to renovate this property. Have you figured out the rehab budget yet? Does it need a roof, HVAC, windows, or electrical panel replacement? Those items are important and really expensive. Get some recommendations locally and get 2-3 quotes.

Honestly at a $6k PP (hard to believe in 2026) you could wholetail this property and probably triple your investment. $18k goes much further in a C/B class location.

Jaron Walling · Answer

@Percy Miller Congrats on the first deal. Bold strategy to buy it at an auction in class D neighborhood! I would get a good education quickly (forums, books, meet-ups, etc.) so this property doesn't become a problem for you.

Oklahoma utilizes a tax deed resale system so you own it outright. If it's your first rental you don't need an LLC. In fact starting one will hinder your ability to secure a cheaper refinance if you're doing a true BRRRR. Stick with a conventional loan, provide the lender documents, and learn from the experience. It's exhausting but everyone does it. Once you have signed leases, steady rental income, and **fingers crossed** good tenants you could quit claim deed properties into an LLC. That was our plan of attack when we started out.

Network with a RE agent and get a CMA. This is best way to find the ARV. In my experience Zillow is usually a bit lower on price. Again every market is unique but having a target (ARV) is massively important if you're doing a BRRRR. It's life and death profit wise if you flip.

Buying a property for $6k in 2026 says a lot. Safe to assume this property needs everything touched and/or the location is difficult. Keep that in mind when you establish the rehab budget. Do not over renovate if the neighborhood doesn't support it. You won't get it back on the refinance and you'll trap more cash in the deal. Cheers.

Percy Miller · Answer

@Jaron Walling The class D property is across from my grandmother's house. The house has around 1,800 square feet on a street that averages 1,000 square feet per house. I don't have the estimated cost of the repairs that need to be done. I'm thinking at this point I might not want to BRRRR the property due to the amount of saved capital I currently have. A simple buy and long-term hold might be my primary plan with a BRRR as an alternative.

Do you use your LLC to keep personal and business expenses separate? Or do you use the LLC to limit liability if your tenants decide to sue?

Vijay Friedman · Answer

@Percy MillerCongrats on your first acquisition. I'd be cautious about relying on Zillow or Redfin alone for ARV, especially on a Class D property. Looking at recently renovated comparable sales in the immediate area—and if possible getting input from a local agent or appraiser familiar with investor rehabs—will usually give you a much more reliable number before you finalize your BRRRR plan.

Percy Miller · Answer

@Vijay Friedman Would you recommend getting a one-stop shop Real Estate agent? Or would you recommend many Real Estate Agents with a specific scope; i.e pulling comps for ARV, acquiring new properties, listing and managing properties?

Possible BRRRR property?

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