Brian Waters BRRRR Key Company
Member since 2026 · 6 posts · 16 votes
Brian Waters BRRRR Key Company
Most Popular Reply
Drew SygitBusiness Member
Property Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votesQuote from @Clarice Johnson:
Hi! I just listened to the podcast with Brian Waters. Does anyone know what company he used to do the done for you BRRRR Key method? I'm looking to get into real estate and think this could be a quick way to do it.
Thanks!
Agghh!
So MANY newbies jump the gun with little to no knowledge based upon very little info:(
Recommend you spend a LOT more time here on BP researching and learning from the Forums.
DM me if you'd like a quick chat about all this.
In the meantime:
How much do you know about Property Classes?
Recommend you spend some time learning about them, so you don’t mistakenly buy a property that will NEVER meet your expectations!
A common issue, so Copy & Paste info below:
You’re ALWAYS better off investing locally, where it’s easier to:
- Learn the market
- Network to find deals
- Network to find contractors
- Be more hands-on
- Driveby property to keep tabs on it
- Network to find a decent Property Management Company (PMC)
Next best location is somewhere else you lived, where you have an existing network of family & friends to help you as accomplish the above list as needed.
If you invest OOS, your biggest challenge won't be finding properties to meet your goals on paper, it’ll be successfully building a knowledgeable & trustworthy local team.
The biggest mistake we see OOS investors making in our market, over and over again, is not fully understanding Neighborhood/Property/Tenant Classes and how they impact your probability of success!
They all run their ROI numbers assuming Class A results – when buying Class B, C & even D rentals.
Then they’re shocked when their performance expectations aren't met😞
If you choose to invest OOS, and have little to no landlord experience, we highly recommend targeting Class B Neighborhoods/Properties/Tenants. If you target Class C, you better be prepared emotionally & financially for plenty of challenges.
You can find Class B properties in the Midwest to BRRRR, but it will take more digging and YOU will need to understand how to analyze & identify them - because a lot of agents, wholesalers, PMCs, etc. will try to sell you Class C or D misrepresented as Class B:
- Many of them don't know/care what Class the properties are, so they're incompetent.
- Others know exactly what they are doing, so should be labeled as crooks!
EITHER WAY YOU LOSE!
Why is Property Class so important for investors to understand and apply in their investing strategies?
Because the Property Class dictates the Class of the tenant pool that the property will attract.
The Tenant Class greatly impacts rental income stability and property maintenance/damage by tenants.
Both Property Class and Tenant Class will affect what type of contractors, handymen and property management companies you should target and be willing to deal with a property.
The Property Class will also impact the maintenance & renovations you do to, “Maintain to the Neighborhood”.
Why is that important?
Well, if you buy & renovate a property in Class D area to Class A standards, what Tenant Class will actually rent it?
Or, if you put several Class D tenants in a Class A four-plex, what do you think will happen to the property?
So, if you fail to apply the correct assumptions to a property, your expectations won’t be met, and it may even be a financial disaster.
We use the following to rank Property Classes, in order of importance:
- Property Tenant Pool: closely linked to location, but not always.
- Property Location: closely linked to tenant pool, but not always.
- Property Condition & Amenities: it’s important to, “Maintain to the Neighborhood.”
Key metrics for each Property Class:
Class A Properties:
Tenant Pool: Majority of FICO scores 680+, no convictions/evictions in last 7 years.
Tenant Default: 0-5% probability of eviction or early lease termination.
Section 8: Class A rents are too high and won’t be approved.
Vacancies: 5-10%, depending on market conditions.
Cashflow vs Appreciation: Typically, 3-5 years for positive cashflow, but you get highest relative rent & value appreciation.
Class B Properties:
Tenant Pool: Majority of FICO scores 620-680, some blemishes, no convictions/evictions in last 5 years.
Tenant Default: 5-10% probability of eviction or early lease termination.
Vacancies: 10-15%, depending on market conditions.
Cashflow vs Appreciation: Typically, 1-3 years for positive cashflow, balanced amounts of relative rent & value appreciation.
Section 8: Class B rents are usually too high for the Section 8 program.
Class C Properties:
Tenant Pool: Majority of FICO scores 560-620, many blemishes, but should have no convictions/evictions in last 3 years. Verifying recent 2-years of rental history very important! Same for 2-years of job/income stability.
Tenant Default: 10-20% probability of eviction or early lease termination.
Section 8: Class C rents usually meet program requirements, proper screening still recommended.
Vacancies: 10-20%, depending on market conditions and tenant screening.
Cashflow vs Appreciation: Should cashflow immediately, at the lower end of relative rent & value appreciation.
Class D Properties:
Tenant Pool: Majority of FICO scores under 560, little to no good tradelines, lots of collections & chargeoffs, but should have no convictions/evictions in last 12 months. Verifying last 2-years of rental history and income/employment extremely important to find the “best of the worst”.
Tenant Default: 20-30% probability of eviction or early lease termination.
Section 8: Class D rents meet program requirements, often challenges to pass Section 8 inspection.
Vacancies: 20%+, depending on market conditions and tenant screening.
Cashflow vs Appreciation: Typically, all cashflow with little, maybe even negative, relative rent & value appreciation.
Where did we get our FICO credit score information from?
Check out this chart:
|
FICO Score |
Pct of Population |
Default Probability |
|
800 or more |
13.00% |
1.00% |
|
750-799 |
27.00% |
1.00% |
|
700-749 |
18.00% |
4.40% |
|
650-699 |
15.00% |
8.90% |
|
600-649 |
12.00% |
15.80% |
|
550-599 |
8.00% |
22.50% |
|
500-549 |
5.00% |
28.40% |
|
Less than 499 |
2.00% |
41.00% |
Make sure you understand the Class of properties you are looking at and the corresponding results to expect.
For example, Metro Detroit has 132 cities and the City of Detroit 183 Neighborhoods, which we’re analyzing and classifying to make better investing decisions.
Horror Stories from those that did NOT Understand What they were Buying:
https://www.biggerpockets.com/forums/48/topics/1137397-baltimore-a-path-to-never-ending-pain
https://www.biggerpockets.com/forums/432/topics/1231840-sell-at-a-loss-or-rent-at-a-loss
https://www.biggerpockets.com/forums/311/topics/840134-memphis-turnkey-tenant-turnover-costs
Logical Property Management4.9451 Reviews
5 Replies
- 1moJimmy LieuBusiness MemberReal Estate Agent · Columbus, OH · Member since 2019 · 3k+ posts · 2k+ votesWelcome to BP! I don't know which specific company Brian was referring to, but I'd be careful about jumping into any "done-for-you" BRRRR program without doing a lot of due diligence first. Some are excellent, while others charge high fees or overestimate ARV and rents, which can really impact your returns. I'd ask for a list of completed projects, actual refinance numbers, client references, and a full breakdown of acquisition, rehab, and management costs before committing. If you're just getting started, taking a little more time to learn how to analyze deals yourself will pay off in the long run, even if you end up using a turnkey or BRRRR provider. Happy to connect and answer any questions you have!
Quote from @Clarice Johnson:
Hi! I just listened to the podcast with Brian Waters. Does anyone know what company he used to do the done for you BRRRR Key method? I'm looking to get into real estate and think this could be a quick way to do it.
Thanks!
Jimmy Lieu, Red 1 Realty4.9120 Reviews - 1moDrew SygitBusiness MemberProperty Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
Quote from @Clarice Johnson:
Hi! I just listened to the podcast with Brian Waters. Does anyone know what company he used to do the done for you BRRRR Key method? I'm looking to get into real estate and think this could be a quick way to do it.
Thanks!
Agghh!
So MANY newbies jump the gun with little to no knowledge based upon very little info:(
Recommend you spend a LOT more time here on BP researching and learning from the Forums.
DM me if you'd like a quick chat about all this.
In the meantime:
How much do you know about Property Classes?
Recommend you spend some time learning about them, so you don’t mistakenly buy a property that will NEVER meet your expectations!
A common issue, so Copy & Paste info below:
You’re ALWAYS better off investing locally, where it’s easier to:
- Learn the market
- Network to find deals
- Network to find contractors
- Be more hands-on
- Driveby property to keep tabs on it
- Network to find a decent Property Management Company (PMC)
Next best location is somewhere else you lived, where you have an existing network of family & friends to help you as accomplish the above list as needed.
If you invest OOS, your biggest challenge won't be finding properties to meet your goals on paper, it’ll be successfully building a knowledgeable & trustworthy local team.
The biggest mistake we see OOS investors making in our market, over and over again, is not fully understanding Neighborhood/Property/Tenant Classes and how they impact your probability of success!
They all run their ROI numbers assuming Class A results – when buying Class B, C & even D rentals.
Then they’re shocked when their performance expectations aren't met😞
If you choose to invest OOS, and have little to no landlord experience, we highly recommend targeting Class B Neighborhoods/Properties/Tenants. If you target Class C, you better be prepared emotionally & financially for plenty of challenges.
You can find Class B properties in the Midwest to BRRRR, but it will take more digging and YOU will need to understand how to analyze & identify them - because a lot of agents, wholesalers, PMCs, etc. will try to sell you Class C or D misrepresented as Class B:
- Many of them don't know/care what Class the properties are, so they're incompetent.
- Others know exactly what they are doing, so should be labeled as crooks!
EITHER WAY YOU LOSE!
Why is Property Class so important for investors to understand and apply in their investing strategies?
Because the Property Class dictates the Class of the tenant pool that the property will attract.
The Tenant Class greatly impacts rental income stability and property maintenance/damage by tenants.
Both Property Class and Tenant Class will affect what type of contractors, handymen and property management companies you should target and be willing to deal with a property.
The Property Class will also impact the maintenance & renovations you do to, “Maintain to the Neighborhood”.
Why is that important?
Well, if you buy & renovate a property in Class D area to Class A standards, what Tenant Class will actually rent it?
Or, if you put several Class D tenants in a Class A four-plex, what do you think will happen to the property?
So, if you fail to apply the correct assumptions to a property, your expectations won’t be met, and it may even be a financial disaster.
We use the following to rank Property Classes, in order of importance:
- Property Tenant Pool: closely linked to location, but not always.
- Property Location: closely linked to tenant pool, but not always.
- Property Condition & Amenities: it’s important to, “Maintain to the Neighborhood.”
Key metrics for each Property Class:
Class A Properties:
Tenant Pool: Majority of FICO scores 680+, no convictions/evictions in last 7 years.
Tenant Default: 0-5% probability of eviction or early lease termination.
Section 8: Class A rents are too high and won’t be approved.
Vacancies: 5-10%, depending on market conditions.
Cashflow vs Appreciation: Typically, 3-5 years for positive cashflow, but you get highest relative rent & value appreciation.Class B Properties:
Tenant Pool: Majority of FICO scores 620-680, some blemishes, no convictions/evictions in last 5 years.
Tenant Default: 5-10% probability of eviction or early lease termination.
Vacancies: 10-15%, depending on market conditions.
Cashflow vs Appreciation: Typically, 1-3 years for positive cashflow, balanced amounts of relative rent & value appreciation.
Section 8: Class B rents are usually too high for the Section 8 program.Class C Properties:
Tenant Pool: Majority of FICO scores 560-620, many blemishes, but should have no convictions/evictions in last 3 years. Verifying recent 2-years of rental history very important! Same for 2-years of job/income stability.
Tenant Default: 10-20% probability of eviction or early lease termination.
Section 8: Class C rents usually meet program requirements, proper screening still recommended.
Vacancies: 10-20%, depending on market conditions and tenant screening.
Cashflow vs Appreciation: Should cashflow immediately, at the lower end of relative rent & value appreciation.
Class D Properties:
Tenant Pool: Majority of FICO scores under 560, little to no good tradelines, lots of collections & chargeoffs, but should have no convictions/evictions in last 12 months. Verifying last 2-years of rental history and income/employment extremely important to find the “best of the worst”.
Tenant Default: 20-30% probability of eviction or early lease termination.
Section 8: Class D rents meet program requirements, often challenges to pass Section 8 inspection.
Vacancies: 20%+, depending on market conditions and tenant screening.
Cashflow vs Appreciation: Typically, all cashflow with little, maybe even negative, relative rent & value appreciation.
Where did we get our FICO credit score information from?
Check out this chart:
FICO Score
Pct of Population
Default Probability
800 or more
13.00%
1.00%
750-799
27.00%
1.00%
700-749
18.00%
4.40%
650-699
15.00%
8.90%
600-649
12.00%
15.80%
550-599
8.00%
22.50%
500-549
5.00%
28.40%
Less than 499
2.00%
41.00%
Make sure you understand the Class of properties you are looking at and the corresponding results to expect.
For example, Metro Detroit has 132 cities and the City of Detroit 183 Neighborhoods, which we’re analyzing and classifying to make better investing decisions.
Horror Stories from those that did NOT Understand What they were Buying:
https://www.biggerpockets.com/forums/48/topics/1137397-baltimore-a-path-to-never-ending-pain
https://www.biggerpockets.com/forums/432/topics/1231840-sell-at-a-loss-or-rent-at-a-loss
https://www.biggerpockets.com/forums/311/topics/840134-memphis-turnkey-tenant-turnover-costs
Logical Property Management4.9451 Reviews - 5dJosh HandlerPro MemberContractor · Memphis, TN · Member since 2026 · 61 posts · 66 votes
Nobody actually answered your question, so here is a real answer plus the part that matters more than the company name.
"Done for you BRRRR" just means one team doing four jobs that normally take four separate vendors: source the deal, do the rehab, place the tenant, then hand you off to the refi. Several shops run that model, mostly in Midwest and Southeast cash flow markets. Full disclosure, I run a construction company in Memphis that does exactly this, the deal and the rehab under one roof, so I am biased. It also means I can tell you precisely where these go wrong.
The company name is the least important variable. Five things decide whether you make money.
Who eats the overage. Ask what happens if the rehab runs fifteen grand over the estimate. If the answer is that you do, you are not buying a done for you BRRRR, you are buying construction risk with a nicer brochure on it. Get that answer in the contract, not on a call.
Who set the ARV. If the company selling you the house is also the one telling you what it will appraise for, that is the whole ballgame right there. Pull your own comps, on the street, not the zip code.
Ask for the last ten, not the best three. Addresses, purchase price, budgeted rehab versus actual spend, appraised value at refinance, cash left in the deal. Anybody who has really done this has it in a spreadsheet. Anybody who will not send it is telling you something.
Street level beats market level. Down here, two houses six blocks apart can be completely different deals. Different tenant pool, different rent, different exit. Anyone quoting you a "Memphis number" without an address is guessing.
Sequence the money first. BRRRR only works if the refinance actually pulls your cash back out. Talk to the lender before you buy, not after demo starts. Seasoning rules and the appraisal are what kill these deals, almost never the construction.
Since rehab is my lane, the things that blow budgets on older stock in markets like ours are cast iron drain lines that have bellied or collapsed, galvanized supply, undersized or obsolete panels, and pier and beam sitting on clay soil that moves with the season. A sewer scope and a real foundation evaluation before closing cost very little and save people five figures over and over.
One honest note. Doing your first deal eighteen hundred miles from home through a provider is not a quick way in. It can be a perfectly good way in, but the speed comes from somebody else absorbing the work, and you pay for that somewhere. Just go in knowing where.
- 4dJames JonesPro MemberInvestor · Collierville, TN 38017 · Member since 2017 · 595 posts · 445 votes
Clarice - every answer here so far, including the good ones, is about the buy. I want to give you the other half, because a BRRRR is not finished at the refinance. It is finished about ten years later, and the done-for-you version of it is designed and priced around the handoff, which happens in month one.
Full disclosure before anything else, so you can weigh what I say properly: I am a Memphis operator. Few hundred doors, majority Section 8, been at it since 2003, and I own my crews and my own management rather than hiring either out. So I am in the business this thread is about. That is exactly why I would rather tell you the thing I would want my own sister told.
A rehab aimed at an appraisal and a rehab aimed at a ten-year hold are two different scopes of work. They cost about the same and they are not the same house.
An appraiser rewards what he can see and measure. Flooring, paint, counters, fixtures, a clean kitchen and bath. He does not add a dollar for a new sewer lateral, a new service panel, or supply lines that are not sixty years old. So the rational move for any provider who is paid at the handoff - including an entirely honest one - is to spend where it appraises. Whatever is left, you inherit, and you find out about it in year two when you are the one writing the check.
So here are four questions to ask about any specific house, and they are worth more than any company recommendation you will get in this thread. How old is the roof and is there a permit for it. How old is the HVAC and what is the tonnage. What material are the supply lines and the drain lines. What type of panel, what amperage, and was it replaced or just relabeled. If the answer to any of those is that the house passed inspection, that is not an answer to the question I asked.
The second thing nobody has mentioned is the rent. The number you will be underwritten at is the rent that unit leased for one time, to one tenant, in month one, possibly with a concession you never see. Your year three rent is the number that determines whether this was a good decision, and in a done-for-you structure literally nobody but you has any exposure to it. Ask what the same provider's units are renting for on renewal, two and three years in, not what they lease for new.
And one thing about your own framing, gently. You said you think this could be a quick way to get into real estate. Of everything you could do, the BRRRR has the most moving parts and the longest feedback loop - you do not learn whether you got it right until the appraisal, and then you do not learn whether the house was any good until two winters later. Done-for-you does not remove that. It just means somebody else absorbs the work, and the price of that shows up inside your purchase price whether or not anyone itemizes it.
If what you actually want is to own rental real estate out of state without becoming a full-time operator, I would tell you to skip the BRRRR on deal one and buy something already stabilized with a real tenancy history you can verify - two or three years of actual rent rolls, actual maintenance spend, actual turnover. You give up the equity capture. What you get instead is a house whose behavior is already known, which is worth a great deal on a first purchase. Capture equity on deal three, when you can tell a real rehab from a painted one by looking at a scope of work.
Happy to be a resource on any of this. If you get to a specific house with a specific provider and you want somebody who owns and operates in one of these markets to look at the scope and the rent assumptions with you before you wire anything, send me a message. I will tell you straight what I think, including when the honest answer is that it is a bad deal and when it is that the right house is not one of mine.
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