Best markets for Flips and BRRRs

[Justin McCord]

Hey all, been a capital partner in a few deals and have experience rehabbing and selling several primary residences over the years but I am looking to take on some rehab investment projects of my own.

I have a HELOC for $150k and working on some additional private funding for another credit line for larger deals or multiples in the future. Id like to execute some rehab flips and BRRRs but trying to decide what market(s) to invest in.

I have been researching several and like a few where I have made some connections but my main concern is connecting with the proper construction crews for the rehab. I have been finding some markets to have issues in that area and that is one of the keys to me in being an out of town investor.

Lot of words to get to the question sorry - what markets have you had experience in for flips and BRRRs and do you have GOOD contacts in the construction trades you would share?

Yes I know the value and importance of agents and PMs as well but to me this seems to be the biggest piece I have having difficulty with.

Thanks so much!

[Marty Boardman]

I live in Phoenix and have been fixing and flipping/buying and holding in Milwaukee since 2012. Since that time I've hired/fired 5 general contractors and sued one of them for 120K (and only got 10K back).

Needless to say, I got sick of all this drama so I hired a project manager instead, and now I pay for my own materials and pay the sub-contractors directly. The project manager gets paid for scheduling and keeping the project moving forward. This gives me a lot more control over the timeline/budget.

The project manager also helps me find new trades because they constantly come and go. It's like being the GM of an NFL team, once players get really good they want more money and become unaffordable.

You can build a reliable rehab team in another market, but it will take time (and require you go there at least 1-2 times a month on your first couple of flips). By doing this you build trust (not just with contractors but anyone else you need on your team like Realtors, title reps, home inspectors).

As @Patricia Steiner pointed out, it's unlikely a pro is going to hand over their best contacts to you if they're already running a successful business.

Good luck Justin!