All Forum Posts by: Sandra McEwan

Make sure any contract provides that seller personally guarantees that he has turned over all information, and that it is all accurate. Also provide that seller must give you tenant estoppel letters.

Seller balks, you walk.

 Hi Alex, thank you for the explanation.  I am a little confused though as a newbie to 5+ units as I have only owned 4+.  You said that you work with other commercial brokers.  Above someone stated that you really only should target listing brokers because commission is not shared.  What is typical in the small MF world 5-20 units?  Do you only work with a local MF broker to help navigate multiple listings or reach out to listing brokers individually?

All of the suggestions above are helpful. I would add to ask for the rental payment history. There may be a lease in place for $1,000 per month, but the tenant could be 3 months behind and the seller's haven't filed for eviction because they want to keep their occupancy rate high in order to sell, or just don't want to deal with the hassle of going to court. They could be allowing a tenant to pay rent late each month, and that tenant will be expecting you to make the same exceptions for them. 

Obviously you will also want to walk all of the units physically during your due diligence period to see the condition of the apartments inside. This is also a great time to talk to the residents that are home. They usually like to share how long they've lived there and how they feel about their home. If they have been asking the landlord to fix something for weeks and it still hasn't been done, they will let you know.

As for finding a larger multifamily building, LoopNet and Costar are the largest listing platforms in our area. Multis are also sold off-market and your agent should be networking with other agents and investors and keep a pulse of who will be selling. I let other commercial agents know what my client is looking for to leverage their network of investors and help find a solution for my clients.

Best of luck!

Yes—BRRRRs are still working great for us. In fact, most of our investors are still using this strategy. While flipping might look more profitable in the short term, BRRRRs are winning long-term because rents are creeping back up toward that sweet 1% rule. We're still picking up properties with built-in equity and adding forced equity through rehab.

Let me break it down with an example: You could buy a house for $200K, put $100K into it, and it’s worth $400K after rehab. If you flip it, you pay closing costs, agent fees, etc.—you might walk away with $50K.

But with a BRRRR? Let's say you buy for $200K, rehab it for $50K (so you're in at $250K), and it appraises for $350K. When you do a cash-out refi, you can tap into 85% of that $100K equity gain—maybe you walk away with $35K, but here's the kicker: you still own the property, you're getting rental income, enjoying passive cash flow, and benefiting from the tax perks. That beats the flip in my book.

We’re also always watching neighborhoods for signs of growth. When we see rehabs, new builds, old buildings getting torn down—that's our cue. We’re not chasing areas that are already gentrified. We're going after spots that are just starting to shift. That’s where the real long-term equity is built. You get in now, ride the first wave of value from forced equity, then 5–7 years later, boom—another equity lift as the neighborhood hits that middle-class sweet spot.

So yes, BRRRRs are alive, well, and honestly, better than ever. 

@James Holmes Yes these are for some reason not talked about as alternative funding..

https://www.rainstarcapitalgroup.com/4hour

Hi Takarra,

Within my 20 years of experience managing over 300 properties and doing 30+ BRRRR deals myself, I've found that it's a smart idea to focus on properties that build equity fast—especially early on. In my opinion, single-family homes tend to be stronger for comps and resale, especially in gentrifying areas, while duplexes are often better for house hacking than the BRRRR strategy.

My personal sweet spot has always been buying in the high end of the low-end neighborhoods—those spots where gentrification is already in motion. I stay away from condos and duplexes and instead stack single-family homes in areas with strong rental history over the past 5–10 years. That way, I can predict rent growth and time my cash-out refi better.

If the deal has enough equity, even if cash flow is a little tight at first, the BRRRR still works great. Just make sure you're setting realistic timelines, and use historical rent trends to estimate when you'll hit that break-even or positive cash flow mark.

Congrats on taking the leap—this is where it starts! Happy to connect if you ever want to chat strategy.

Jorge Vazquez

One thing I enjoy doing is doing actual vacancy and turnover analaysis. So if a tenant's lease is ending in May, I decide if I'm planning to raise rent and if I'm raising it by a lot I assume they'll move out and that it will take two months to get a new person. I also take into consideration the turnover cost in my maintenance costs.

If a lease is coming due and I'm not planning to raise rents, I make an assumption as to whether or not they'll renew at that rate.

@Sandra McEwan thanks for the reference:)

How about a vote?

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