2018 Goals using the BRRRR Method - And other Possibilities

[John Gentile]

Hi BP,

My goal in 2018 was to buy 2 single families or condos via the BRRRR method, and a more traditional multifamily investment for my SDIRA (which I have not began searching yet).

I like condos because the prices are lower and the properties are lower maintenance (as long as the HOA details check out). The downside is it is difficult to obtain the margins needed to get a big portion of my initial cash input with the BRRRR method.

Single families are more favorable for the BRRRR method because you can add more value and forced appreciation. However the prices are too high in my area. I'm looking to stay within the 100-125k range.

I'm finding in the expensive eastern Massachusetts market, it is difficult to make the numbers work - the prices are high and a lot of offers are going for close to asking price (even for rehab properties). My next step is to attend some local AREIA meetings and find wholesalers who have some off market deals with value (to this point I have been using MLS only).

I'm not giving up on the BRRRR strategy, but I am starting to consider other possibilities. I was hoping to get your thoughts:

1. Using a turnkey company:  The ease of this is appealing and the numbers in the more favorable markets are even more appealing.  I don't like that the property is so far away, and in the beginning at least, I want to be more hands on and not use property management (I may research turnkey more in depth in the forums)
2. Partnering with another investor: I know 50% of a deal is better than 0% of no deal. I'm doubting anyone wants to partner on smaller investments. That typically works for multifamily. If I go that route, I'm not sure I can build the volume of properties as the down payments, even when split, will be very high. The reason for using BRRRR was to be into properties for as little as possible and to build a portfolio as I am preserving capital. It could also take awhile to find a partner whose goals align.
3. Buy local condos or single families in my area, but forget about BRRRR. Just ensure it cash flows and the numbers/details check out. The pros are I invest local, but the cons are it takes longer to achieve goals and build capital for the next deal, as I have eliminated the refinance and repeat pieces. Not sure that trade off is worth it.
4. I have a friend who flips properties. I can focus my efforts on partnering with him this year and building capital. This allows me to find some more expensive properties where I can add value and continue with the BRRRR method. The downside is I may have to put the "buy 2 properties per year" goal on hold.

Any input or insight you can provide would be much appreciated.  Thanks!