Who is having success on their BRRRR portfolio in DC?

Question

I'm looking to hear from investors in the DMV on how their BRRRR properties are doing in this current market? Any tricks and tips! Lets talk!

Jeremy D. · Answer

I just finished my Reno BRRRR project but missed the window on rates. With them being in the 6's now I'm switching to what @Cassidy Burns said and getting a HELOC from Arlington Community Federal Credit Union. Which is offering almost 100% LTV. All this was done on a owner-occupied loan paying 3.5% down and funding the renovations with a 203k loan. Wish I could do it again but I can't get refinanced into a conventional loan until the rates fall back down a bit more which would free up having another FHA loan to use.

Bobby Feinman · Answer

To EVERYONE that has posted on this thread...thank you for an AWESOME thread!! Every response has been informative, helpful and useful. I am a lender "down the street" in VA Beach. Left the DMV 30 years ago and have a son living in DC.We assist many of our clients with BRRRR, providing short term funding followed by a DSCR cash out. Love the DMV and am wanting to increase our presence there. Will be placing an ad in the classified section soon for LO's.Thanks again for the content. Look forward to seeing much more!

Jay Thomas · Answer

Having capital to invest in Real Estate is essential to success when it comes to BRRRRing in DC. The typical acquisition price of a property can range from $550-650k, with an additional $150-250k for renovations. To be successful at BRRRRing Real Estate investments, having sufficient capital available is the number one tip. To maximize your chances of success and increase returns, it’s important to have a great understanding of the local market and its trends. Knowing which properties are worth investing in and what renovations will add the most value will help you get closer to achieving your goals. Before jumping into any Real Estate investment project, make sure you have researched the area thoroughly and have enough capital to get you through any unexpected expenses. Good luck!

Tyler Welch · Answer

10/10 response. Thanks for breaking that down, I understand exactly what you mean!

Jack Seiden · Answer

This is extremely simple example obviously life is much more complicated, but a u.s. bond pays 5% interest and pays out 100% of the time. A 2nd world bond pays out 10% but defaults 50% of the time=5% expected return. A 3rd world bond pays out 20% defaults 75% of the time= 5 expected return.

Russell Brazil · Answer

They major determinant to success and biggest tip to BRRRR in DC is having capital. A typical BRRRR here will have a $550-650k acquisition price with a $150-250k renovation cost.

Jack Seiden · Answer

I think Airbnb is a bubble, think mid term is possibly one too, this is not to sound negative and like a naysayer, again if you find good deals which there are tons of, break even or even lose a little cash flow, and wait for rent growth/appreciation you’ll kill it in 5-10 years time. But these ways of jucing cash flow sound a lot better in theory than in practice (big fan of the efficient markets theory which posits that if you are getting an outsized return there is hidden risk somewhere.) you should buy real estate because with smart leverage it’s the best coc return you can get, doesn’t make it a magical asset class, I think people who go back to fundamentals investing have a great opportunity and will do quite well, I think people who try to significantly beat market returns don’t realize the risk they are taking and the ability to get wiped out.

Tyler Welch · Answer

Oh my bad man its been a long day I misread your first sentence lol. 10000% Yep agreed. Permitting in DC and the historic side can cause some setbacks as well i bet. What are your thoughts on NOVA area? Do you have any properties over there? I see airbnb actually picking up around the PWC area which is strange regarding its location to the city.

Tyler Welch · Answer

@Jeremy D. How many do you plan to do in the area this year? I can definitely understand that frustration.

Tyler Welch · Answer

That's great advice. All in all I am newer to the investment side of things. And as I have gotten older I have seen more often times than not people are over thinking and over complicating. I think Virginia has a huge market for 5-10 year growth like you said. Especially the Northern Va and even outsourcing to Stafford. WFH has pushed a lot of people west, and pockets of areas are showing a lot of growth. Can you go into more detail on the efficient markets theory? And give me an example?