All Forum Posts by: Jalen Greenlee

- Investor Friendly RE Agent: Premier Point Realty & Homestead Realty agents & Nick Knox III
- Reliable Contractor(s): Wisconsin Contractor & Handyman Club on Facebook
- Property Manager: Citywide Rental & Property Management, Welcome Home Milwaukee, MKE Leasing & Smart Asset
- Investor Friendly Lender(s): Too many to name but try Dennis at Homestead Mortgage--for hard money: Mach1 Lending, MGM Capital, Wisconsin Hard Money, The Hard Money Co/F-Street
- Title Company: Stewart Title, Land Title, Superior Title
- Wholesalers: me and join off market deals with details group on Facebook
- Insurance Broker: Bob Dummer at PC Insurance

Hey Jalen - 

I work with a lot of investors in Milwaukee, and also am an investor myself here too. 

On paper and in practice, the BRRRR strategy is great. Phenomenal CoC returns, recycle your money, ability to scale, etc.

For Milwaukee specifically, the most difficult part of doing a BRRRR here is finding the deal. For any property purchase, the deal is made when you buy, not when you sell. The majority of inventory in Milwaukee that is listed on MLS as an "investor special" or with "value add" etc, typically does not have enough spread to exit a deal with no money down post refi.

The common rule talked about with BRRRR is the 75% rule (you want your purchase + rehab costs to be 75% of the ARV). If you find a deal like this, typically you can leave no money in the deal post refi.

Where I see most deals priced on the MLS now are going to be 85% - 95% deals, meaning that post rehab, you have created about 5% - 15% of equity.

Your best bet to find a BRRR deal (or even a flip deal) is to connect with off market resources (wholesalers, agents that specialize in this space), or to cut these people out and source deals yourself. Door knocking, postcards, cold calling, etc. are going to be the best bet for finding something that is going to hit the numbers you need.

Well, here is an answer that's not from ChatGPT.

Let appreciation do some of the heavy lifting for you. It used to be much easier to find properties that were discounted for condition. Milwaukee inventory has been so low since 2021 that sellers don't have to offer a discount for condition, some uber- motivated first-time home buyer will pay full fare. 

The flip side is you have now a tailwind from considerable market appreciation that can do some of the heavy lifting for you, so by the time you are done with your rehab (forced appreciation) the market will have also moved on. Pick your projects accordingly.

@Jalen Greenlee

Here are some BRRRR nuances that I have learned along the way:

It is easy to underestimate your rehab budget. - make sure to get bids from multiple contractors and have adequate reserves.

It is easy to overestimate your ARV. - Have an agent pull recent comps for you

It is easy to underestimate the timeline. - whatever a contractor says, add 4 weeks.

It is easy to underestimate loan costs. - look at previous settlement statements or get an estimate from your title company.

Hey Jalen, 

I agree with John. A BRRRR can be done in nearly any market if you have the right tools / gameplan. Check out this BP article that sheds further light on this topic. Also, feel free to reach out with any questions!

 https://www.biggerpockets.com/blog/brrrr-loans-what-are-the-...

You can implement this strategy in any market if you make the right purchase. First, determine what your lender offers in terms of Loan-to-Cost (LTC) for acquisitions and the maximum Loan-to-Value (LTV) for a seasoned cash-out refinance. With this information, you can calculate the maximum cash-out amount on the refinance. Once you have that figure, estimate the monthly payment and potential rental income to calculate your DSCR ratio, ensuring it meets your lender's requirements. Feel free to reach out if you need assistance.