First Rental in the US

Albuquerque, New Mexico
BRRRR - Buy, Rehab, Rent, Refinance, Repeat
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First Rental in the US

Jim M.Pro Member
Member since 2026 · 5 posts · 0 votes

Hello, new to REI and the BP.

I'm interested in starting to do BRRRR as a stepping stone to multifamily. I'm mostly looking in Cleveland, OH; Detroit, MI; or maybe in my area, Albuquerque, NM. I'm looking for distressed properties in the area (under $70k) to apply the BRRRR strategy and then rent them out under Section 8.

Anyone have any insights or recommendations?

Capital: ~ $14-18k cash

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  • Ashish AcharyaBusiness Member
    CPA, CFP®, PFS · FL · Member since 2017 · 5k+ posts · 3k+ votes
    5h

    Jim, BRRRR can be a great way to build a portfolio, but with $14K–$18K available, I'd be especially careful about underwriting the total cash requirement, not just finding a property under $70K. I'd calculate the purchase, closing costs, rehab, financing, carrying costs, and a healthy contingency before deciding what you can actually afford. You don't want the first unexpected repair to wipe out your reserves.

    I’d also be conservative with the refinance. Underwrite the deal at a lower-than-expected stabilized value and make sure it still works if you don't get all of your original capital back.

    For the Section 8 strategy, I’d verify the local payment standards, inspection requirements, and realistic rent before buying. The rent needs to work with the actual property, not just the market's headline numbers.

    From the tax side, once the property is placed in service as a rental, depreciation becomes part of the overall return. Since you're planning a significant rehab, I'd also keep purchase costs, repairs, capital improvements, and financing costs carefully documented from day one. That will make the tax treatment much cleaner as you build the portfolio.

    With your current capital, I'd focus on finding one deal you can execute safely and still have reserves afterward. The first successful BRRRR is more valuable than stretching into a deal that leaves you cash-starved. Happy to connect!

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    • Jim M.Pro Member
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      Member since 2026 · 5 posts · 0 votes
      2h

      I have been calculating operating expenses (PM, maintenance, vacancy, taxes, etc.), but haven't done the Section 8 research. I'll start working on that.

      Thank you, @Ashish Acharya

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  • Matthew MorrowBusiness Member
    Investor · PA - NY - NJ · Member since 2019 · 489 posts · 175 votes
    5h

    @Jim M. Welcome! With $14-18K, BRRRR under $70K is doable, but there's very little room for error. A rehab overrun or a light refi appraisal can tie up your whole stack. Starting close to home lets you walk properties and meet contractors in person. Before you buy, call the local housing authority and ask about payment standards and inspection timelines. That one call tells you a lot. Line up your refi lender before closing too.

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    • Jim M.Pro Member
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      Member since 2026 · 5 posts · 0 votes
      2h

      Yes. I should add to my planning a realistic timeline from purchase to rent. I will contact the HA.

      Thank you, @Matthew Morrow .

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  • Drew SygitBusiness Member
    Property Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
    2h

    How did you pick that price point please?

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    • Jim M.Pro Member
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      Member since 2026 · 5 posts · 0 votes
      1h

      Honestly, based on the capital I have available, I estimate the closing costs and down payment without depleting all my savings.

      The book The Multifamily Millionaire Vol. 1 covers maximum and minimum purchase prices (MaPP & MiPP). I am going to revisit that and check my numbers.

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  • Juan YepesBusiness Member
    Lender · Miami, FL · Member since 2025 · 126 posts · 35 votes
    2h

    Hi @Jim M.

    With 14-18k in capital, I would recommend a different strategy. Completing the BRRRR strategy is capital intensive compared to other options.

    1. Fix-and-flip loans require at least 20% down payment, 25%+ if you’re a new investor. You also have to cover closing costs. In addition to down payment and closing costs, lenders require savings of about 3-6 months of monthly payments because taking on a project like this with no savings makes the deal look riskier.

    2. When you refinance you’ll have to pay closing costs again. At 70k price point, most of the value you create would probably go towards paying closing costs again.

    I suggest you look into house hacking a multifamily. Buy with FHA or conventional 3-3.5% down payment and negotiate for the seller to cover the closing costs. This type of loan won't require for you to have reserves. So with your 18k you could afford up to 514k to buy 2-4 units. Live in one and rent the rest. After 12 months, you can move out and rent your unit too if you want. And if you want to find a distressed property, renovations can be covered financed into these type of loans too.

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  • Jim M.Pro Member
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    Member since 2026 · 5 posts · 0 votes
    1h

    Thank you, @Juan Yepes That's the strategy for the next move (military family). Unfortunetly, I bought a house because I got scared and had no strategy at the time.

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