Would you recommend a remote BRRRR as your first investment prop

[Madhav Thaker]

The title essentially sums up the question. I'm sure there are many out there who live in markets that have a high financial barrier to entry and have thought about investing elsewhere. 

As a first time investor, I'd love to hear from folks who have done this. I'd like to know how you made it happen and if you'd recommend it to someone else starting out. 

I live in the LA market with no option but to live in a very expensive area (forced to live close to the hospital!)

Looking forward to hearing from you.

MT

[Joseph Cacciapaglia]

I often discourage new out of state investors from using the BRRRR strategy. I sell investment properties in San Antonio, and because of this I get a lot of inquiries from people in higher priced markets that are looking to invest here. Lately most of these new investors have wanted to BRRRR (it's kinda funny how getting a new name made an old strategy so popular). It's certainly possible to do a remote BRRRR on your first deal, but in general I believe you're setting yourself up for failure. The few investors that I know that execute the strategy well are basically magicians, or at least have amazing project management skills, experience dealing with contractors, and loads of free time. For the most part, I recommend a more standard buy and hold strategy to get started. Why not learn to walk before you start doing cartwheels?

I have a lot of clients that start with buy and holds first, which allows them to get comfortable with their team and the market. Over time, they may branch out into strategies that require more involvement, like flips and BRRRRs. However, some decide that traditional buy and hold suits them just fine. Another strategy that works well is to execute flips locally, and then park your profits in buy and hold deals in better markets.

I'm sure there will be a lot of people that will happily share their successes with the strategy, but for every one of those, I would bet there are 4-5 that lost their shirts. Unfortunately, a lot less people are willing to share their failures. Those that do often try to spin it into some great learning experience, but you don't have to fail that hard to learn.