Any successful BRRRR in Jacksonville, Florida in the last 6-12 months?

[Lilach Holtzer]

If yes, which neighborhoods is relevant?
I have doubts because the rent is too low in relation to purchase price and other expenses?

[Katie Smith]

Hi Lilach!

I wanted to follow along with this post. Most of my clients that invest in Jax are mainly doing fix and flips. I do have a few that have kept rentals - mostly near the hospital. Eager to hear what others have to say!

[Calvin Drake]

Quote from @Lilach Holtzer:

If yes, which neighborhoods is relevant?
I have doubts because the rent is too low in relation to purchase price and other expenses?

 It's possible, but realistically you may be looking at keeping some in the deal and not pulling all of your cash back out. One of the awesome parts of the Jacksonville buy and hold market is the appreciation and the affordability. Not many coastal markets where you can buy a block home under 100k!

[Ibiene Solomon-Zacchaeus]

Quote from @Lilach Holtzer:

If yes, which neighborhoods is relevant?
I have doubts because the rent is too low in relation to purchase price and other expenses?

Yes Lilach, there's been a number of successful BRRRR, your why for venturing into Jacksonville market for BRRRR should guide your search. You have places like Springfield, Riverside and Avondale, West side etc... let's connect to talk better.

[Basit Siddiqi]

Quote from @Lilach Holtzer:

If yes, which neighborhoods is relevant?
I have doubts because the rent is too low in relation to purchase price and other expenses?

I think Jacksonville, comparitive to the nation has good rent to purchase ratio's.

However, from what I am reading, Jacksonville is going through a huge increase in supply of houses.

I think you can always make a deal happen in any city but I would personally wait until the new supply is absorbed.

[Melissa Veazie]

Quote from @Lilach Holtzer:

If yes, which neighborhoods is relevant?
I have doubts because the rent is too low in relation to purchase price and other expenses?

I’m also curious as we aren’t seeing many buy and hold investors lately. Usually we are busy with onboarding investors into management, but this has also slowed. 

[Lilach Holtzer]

Quote from @Ibiene Solomon-Zacchaeus:

Quote from @Lilach Holtzer:

If yes, which neighborhoods is relevant?
I have doubts because the rent is too low in relation to purchase price and other expenses?

Yes Lilach, there's been a number of successful BRRRR, your why for venturing into Jacksonville market for BRRRR should guide your search. You have places like Springfield, Riverside and Avondale, West side etc... let's connect to talk better.

 Would love to, writing you in DM

[Lilach Holtzer]

Quote from @Katie Smith:

Hi Lilach!

I wanted to follow along with this post. Most of my clients that invest in Jax are mainly doing fix and flips. I do have a few that have kept rentals - mostly near the hospital. Eager to hear what others have to say!

 Hey Katie, 
Yes It's a good market for fix and flip, back than in 2019-2021, it was also a good market for Brrrr, but I think nowadays it's hard to make a perfect Brrrr and to cash out all or most of the money back, but yes let's hear what people have to say :)

[River Sava]

Hey Lilach - 

I've seen some successful BRRRR deals in Jacksonville recently, particularly in areas like Riverside and Springfield. Those neighborhoods have been popular because they offer a decent balance between purchase price and rent potential. While rents can be on the lower side in some areas, the key is to find properties where you can add enough value through rehab to make the numbers work. It might take some digging, but with the right deal, it's definitely possible to make it work in Jacksonville.

[Lilach Holtzer]

Quote from @Basit Siddiqi:

Quote from @Lilach Holtzer:

If yes, which neighborhoods is relevant?
I have doubts because the rent is too low in relation to purchase price and other expenses?

I think Jacksonville, comparitive to the nation has good rent to purchase ratio's.

However, from what I am reading, Jacksonville is going through a huge increase in supply of houses.

I think you can always make a deal happen in any city but I would personally wait until the new supply is absorbed.

 Hey, Basit
It can take 1-2 years to wait, isn't it?
and can you share where do you see a good ratio between PP to rent? most of what I saw is not even the 1% rule, maybe 0.5%, that's what bring me to ask in the first place :)

[Lilach Holtzer]

Quote from @River Sava:

Hey Lilach - 

I've seen some successful BRRRR deals in Jacksonville recently, particularly in areas like Riverside and Springfield. Those neighborhoods have been popular because they offer a decent balance between purchase price and rent potential. While rents can be on the lower side in some areas, the key is to find properties where you can add enough value through rehab to make the numbers work. It might take some digging, but with the right deal, it's definitely possible to make it work in Jacksonville.

 Hey River Sava, thank you for sharing your thoughts 
from what I saw in the last few weeks in Springfield, are properties that needs total rehab, I hoped to go for cosmetic rehab :) but to add value is something that really important for me. however, I'll dig deeper around those areas, thanks again

[Chris Grenzig]

@Lilach Holtzer hope your well after our chat a couple of weeks ago!

Maybe lenders do see some BRRR's but I think the amount that are happening in Jax are the rare case right now, and not probably deals you're finding on the MLS, probably direct to the seller. And if that's the case, I would be surprised if the cost to reach the sellers and the time as well is being factored into the deal costs so does that even really count?

I do think you would have to be very close to the 1% rule with your all-in cost to rent in order to refi out a bunch of money and even then you may not get it all. 

$1,500 rent

40% expenses

$900 NOI per month

$10,800 NOI per year

at a 7% cap rate that's $154,285 cost per unit

$154,285 loan at 6% and a 30 amortization is $925 which is a 0.97 DSCR

For $900 a month NOI per unit, to get to a 1.25 DSCR you would need a monthly mortgage payment of $720 per unit. To get that you could only borrow $120,000 at 6% with a 30-year amortization.

So even if you could find a property or MF property where your all-in cost is $154k/unit you could only borrow $120k per unit which is a 78% loan-to-cost ratio so this isn't a BRRR.

And good luck finding multifamily in Riverside and Avondale for less than $120k a unit and if you do, your all-in cost isn't $120k per unit once you're done. 

Want to do a single family house?

$2,000 rent for a 3x2 1500 SF house is pretty fair

$2,000 at a 30% expense ratio which is way too low is

$1,400 NOI per month

$16,800 NOI per year

a 7% cap rate is $240,000

$240,000 at a 6% interest rate and 30-year amortization is $1,428.92 per month or a 0.97 DSCR

To get to a 1.25 DSCR at these numbers you could only borrow $187,000 at a 6% interest rate with a 30-year amortization.

Find me a deal you can be all into for $187k that rents for $2,000 in Jacksonville and I'll find one of two things. The deal of a lifetime or a deal with incorrect numbers or problems that aren't being addressed. 

If someone is actually doing a BRRR in Jacksonville I would actually love to see it because I just don't see how it can be done without spending a ton on direct marketing costs and then those costs should be added and I'd be curious if it's still an actual BRRR. I genuinely welcome someone to give me a real example with actual numbers showing how I'm wrong and I will fully admit it, but I just don't see how.

[Lilach Holtzer]

Hey Chris, good to hear from you,
thank you for your detailed opinion that you brought here, you made me think about it deeply and to compare markets, I'll do some homework this week :)
@Chris Grenzig

[John Salcedo]

Quote from @Chris Grenzig:

@Lilach Holtzer hope your well after our chat a couple of weeks ago!

Maybe lenders do see some BRRR's but I think the amount that are happening in Jax are the rare case right now, and not probably deals you're finding on the MLS, probably direct to the seller. And if that's the case, I would be surprised if the cost to reach the sellers and the time as well is being factored into the deal costs so does that even really count?

I do think you would have to be very close to the 1% rule with your all-in cost to rent in order to refi out a bunch of money and even then you may not get it all. 

$1,500 rent

40% expenses

$900 NOI per month

$10,800 NOI per year

at a 7% cap rate that's $154,285 cost per unit

$154,285 loan at 6% and a 30 amortization is $925 which is a 0.97 DSCR

For $900 a month NOI per unit, to get to a 1.25 DSCR you would need a monthly mortgage payment of $720 per unit. To get that you could only borrow $120,000 at 6% with a 30-year amortization.

So even if you could find a property or MF property where your all-in cost is $154k/unit you could only borrow $120k per unit which is a 78% loan-to-cost ratio so this isn't a BRRR.

And good luck finding multifamily in Riverside and Avondale for less than $120k a unit and if you do, your all-in cost isn't $120k per unit once you're done. 

Want to do a single family house?

$2,000 rent for a 3x2 1500 SF house is pretty fair

$2,000 at a 30% expense ratio which is way too low is

$1,400 NOI per month

$16,800 NOI per year

a 7% cap rate is $240,000

$240,000 at a 6% interest rate and 30-year amortization is $1,428.92 per month or a 0.97 DSCR

To get to a 1.25 DSCR at these numbers you could only borrow $187,000 at a 6% interest rate with a 30-year amortization.

Find me a deal you can be all into for $187k that rents for $2,000 in Jacksonville and I'll find one of two things. The deal of a lifetime or a deal with incorrect numbers or problems that aren't being addressed. 

If someone is actually doing a BRRR in Jacksonville I would actually love to see it because I just don't see how it can be done without spending a ton on direct marketing costs and then those costs should be added and I'd be curious if it's still an actual BRRR. I genuinely welcome someone to give me a real example with actual numbers showing how I'm wrong and I will fully admit it, but I just don't see how.

I also think this is the case for all Florida markets.  I’ve been an investor in FL for over ten years but recently I am only buying out of state.   Seeing great numbers but it has taken me months of research and networking.