Low Inventory and High Demand

[Andy Borses]

I am doing the BRRR strategy and I'm finding it difficult to find good deals in several states because of Low Inventory and High Demand. When I run the comps from 6 months to a year ago I'm finding that the ARV is less than the 70% rule because of the fact that the homes that sold in the past 6 months to a year sold for less money due to supply and demand.

So my question is... who is running into the same issue, and what advice if any would you suggest on overcoming this trend I'm seeing?  

[Will Fraser]

For sure, @Andy Borses. This is pure and simple economics. Supply is down, demand is up therefore prices are up. However, since a HUGE driver of the demand is . . . drumroll . . . investors wanting value-add properties (surprise!) it is particularly affecting houses that would otherwise be an ideal BRRRR home.

The way to overcome would be to find a different market or approach, force the issue and accept a lower return, or wait out the present situation and buy when it makes sense.