How to Form First Core Four (BRRRR Team)

Question

Hello, I want to move forward in forming my first BRRRR team here in the Upper Peninsula of Michigan but I'm not quite sure where to start.

I've seen a few foreclosed properties around my area for less than $50k in neighborhoods where it would appear that if these homes were really fixed up they could ARV for $120k (or more). So from my newbie perspective a 75% all in of ARV appears realistic but I need to get some experts on my team to run the numbers and get things moving.

For capital I could use 90-100k of my own cash, so who should I contact first to begin building this whole BRRRR team? I mean in general what sort of expert should I try finding first, but if someone has specific people in mind who deal with the UP that works for me too. I'm looking in Marquette County.

Thanks!

Charles P. · Answer

(I’m also in the UP) I know when I started, (and I’m still very new), I just went and sat down with several realtors, just chatted with them and just through conversation found one I liked a lot. Found out which ones invested themselves, and through questions about the local market and about rentals found out which ones truly knew what they were talking about and additionally were very open about discussing it with me. You can tell who is actually passionate about their job and passionate about the market usually pretty quickly. Just come up with a list of questions (especially ones you might even already know the answer to) and sit down with a few.

I don’t know if it’s already been said and you may already know this, but remember the term “team” is a very loose term. This is not a literal team, and you don’t want to be blunt by like asking people to join your team. Your “team” is just basically a list of people that are experts in their field that you can call and/or meet-with when you need them. Start collecting contact cards and fill that phone with everything from plumbers and painters to bankers and lawyers.

sorry this is so long and drawn out. I’m eating breakfast and adding thoughts as they pop in my head.

I ask everyone I meet who they recommend, like I asked my realtor for bankers and contractors etc, and in turn ask the bankers for realtors they like. Over time you’ll see a lot of people say the same names and you end up with a self-confirming list of recommendations.

Tim Ryan · Answer

Hi Chris,

If you are not a contractor, get one. Or an experienced flipper/rehabber.

What you don't want to do is bring in partners who are just like you. I've seen this and it's the blind leading the blind.

Kyle Aho · Answer

Completely agree with Michael. Best way to learn is get started.

Another great property management starter book was Landlording on Autopilot - Mike Butler. We still use some of those same principles today. We own and operate a mid size REI and property management company in Marquette Co. (~300 units or so). We built it out of necessity and started same way as everyone, cut our teeth on bad decisions. There’s more books available to speed up the learning curve now then there were a few years back.

Drew Sygit · Answer

@Chris Kay to learn to properly DIY manage you have two basic options:

1) Trial & fire on your own, hopefully not making a major mistake that costs you tens of thousands of dollars.- Once your time is more impotant to you then the cost of a PMC, you can hire one.

2) Hire a PMC to guide you on your first rental and learn from their expertise.- You can buy additional properties and DIY manage those, perhaps leaning on the PMC for any issues you're not sure how to handle on your own.

Good luck:)

Joseph Bui · Answer

Hi Chris, I have a portfolio of 10 properties across Detroit and Memphis. There are multiple paths to forming a team from finding each part on your own to working with a turnkey company. I've done various methods and would be happy to connect and knowledge share if you are interested.

Jeff Roth · Answer

Hi Chris from the U.P. of Michigan.

Congratulations on deciding to get into real estate investing with your first Buy, Rehab, Rent, Re-finance, and Repeat or BRRRR and you are wondering where to start and who you should add to your team first.

It is good you have cash or cash equivalents to buy the property and complete the repairs.

As far as who to have on your team first, I would say an investor friendly Realtor who can help you find deals and introduce you to the rest of the team like a good property inspector to hopefully let you know about potentially expensive repairs early before buying the property so you can buy it well or not buy it at all. Related, you will want a contractor who is used to doing projects like this on schedule and on budget. Make sure you have the right property insurance while the property is being worked on and an investor friendly lender or local credit union can help you refinance or get a HELOC.

To Your Success!

Preston Dean · Answer

NO Chick- Fil- A! huge disappointment @Chris Kay

Preston Dean · Answer

@Chris Kay

I get that. Another tactic you could try is Google searching "Keller Williams Brokerage Near Me" just pick up the phone and call the front desk. I would ask to be connected with a fairly new real estate agent. Reason being is because they will be a lot "hungrier" to find you such a small deal. I say Keller Williams because I used to be an agent there and I know they are a large brokerage world wide.

100% of $1,000 commission is still better than 100% of $0 commission.

Chris Kay · Answer

@Mike Dymski thanks for the advice! Okay I'll reach out to some realtors and see what they say. I already talked to one who helped me find my current single family home and she said she could help me find a multifam. I just recently came up with the idea to BRRRR too so I'll see what she says about finding these significantly cheaper properties.

Mike Dymski · Answer

It's like anything new, you just have to start and figure it out as you go.  Sounds like you need an agent and/or contractor based on your strategy.  Don't worry about whether an agent would find you properties less than $50k.  Just search and try to find ones that understand sourcing investment properties.  You may find that you are looking at the wrong properties...or that you are looking at the right ones...or you switch strategies.  Just start and find the answers along the way.  Same for contractors.  Post on local Facebook pages for contractor referrals, go to local REIAs, and ask your potential agents and PMs (even if not using a PM at first...you may at some point).

There is only so much that service providers can do and many of them are far from "experts"; so, be prepared to be your own expert at being willing to figure stuff out as you move forward.

How to Form First Core Four (BRRRR Team)

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