Introduction, Getting Started with a BRRR

[Charles E Nielsen]

Hello everyone, I am a new real estate investor from Malad. I wish to get started in the local market, as well as in Pocatello. I’m planning on BRRRing some cheap houses or duplexes to get my feet wet and begin to build up my portfolio. I’m also interested in BRRRing for STRs in the Lava Hot Springs area. I want to find my own deals (with standard mortgages) to start. Does anyone have experience in these areas? Am I up in the night? Any tips would be appreciated.

[Bonnie Low]

We've bought in Pocatello. We like pretty much everything about Pokie except for one thing. It's very strong for blue collar rentals. It's a University town with a rapidly expanding medical services sector. It's a transportation hub for the entire region so you have tons of freight moving through there, railroad and distribution centers. It has high tech employment opportunities in the area and a newly constructed regional FBI headquarters that employs a lot of people. It also has a lot of older housing stock in need of repairs that you can pick up fairly cheap compared to more popular areas like Boise. And the proximity to Lava Hot Springs is awesome if you like hot springs (which I do!). And, in general, housing is appreciating. The one thing I don't like is that the cost to buy a fixer upper has increased noticeably, rehab costs have increased somewhat like pretty much everywhere, but ARV on those flipped houses is not keeping up. This makes it tough to BRRRR and get your money back out, which is our model. I'm not sure why this is happening. I suspect it might have something to do with all the new building that's happening towards Chubbuck. That new housing stock is bringing good prices, but it doesn't serve as comps for rehabbed homes in the heart of town. I don't know if that's why - it's just a guess. Even looking at some off market deals we're just not finding the ARV to justify it. It's worth keeping an eye on, though, because this could change.