Long Distance BRRRR Advice

[Robert Gati]

Hey BP,

I'm hoping to get some advice from investors who have successfully done a long distance BRRRR.

I'm hunting for my first investment property and my goal is to do an out-of-state BRRRR for a single-family home.

I read @David Greene's fantastic book, and have been following his methodology step-by-step.

I'm currently in the team-building phase to have my boots on the ground. So far, I've started working with a real estate agent I think is great, and also believe I've identified a property manager that I think is a good fit for me.

The agent has been bringing me deals that seem to fit my parameters. I've been able to ask the PM for an opinion of rent ranges and neighborhood strength of these potential deals so I can analyze them properly. Now the last piece for me before I feel confident making offers is getting a grasp on a potentials deal's rehab needs (the rehab part is my big blind spot as an investor).

I've put together a list of about 10-12 contractors to initially contact in the area, but I feel a bit hazy on the bid process, and how often you can ask contractors to look at houses and give you an estimate on repairs. If the BP podcast is true that 9 out of 10 of your offers don't make, do you out-of-state investors constantly ask the same contractors to look at homes you are considering? How many times can you do that with a contractor before it becomes exhaustive on the investors part? Or is this all the expectation for everyone who is a part of your team? I feel confident in most aspects of deal-analysis, except for understanding repair costs, especially when looking at online pictures from afar, so this is the area I'm feeling a bit stuck before truly engaging in any kind of offer-making.

Thank you to any experienced long-distance BRRRR investors that are willing to share some wisdom with a newbie like myself!

Rob

[Aaron Cullen]

@Robert Gati

That is one of the tricky parts to control. I use a 2 prong approach. If you are making MLS offers you don't have to have the contractor go by to make an offer. Depending on your market, you might not get the offer accepted or countered if you are offering a lot lower than list. I just take an educated guess on Reno and make the offer (this gets easier as you get more experience). If they counter or accept THEN have a contractor go out and get a bid. You can also ask your agent or PM what they think could be a Reno estimate if they have been to the property. This only works if they have experience with investors doing rehabs but at least it gives you a ball park figure until you get better at estimating your self.

If it is an off market deal then I have a contractor go out immediately. 

Some contractors will also charge you for a bid, you might offer to pay a fee for them to go out and give you a bid to compensate them for their time. That might make all parties feel better about the transaction. 

I usually get 2-3 bids per project to compare.