Is Flipping & BRRRR Still Feasible in Southern California? Looking for Real Insights

[Lee Lance Leoncio]

Hey everyone,

I’m new to real estate investing and currently working on breaking past my fear and mental limitations to finally take action. I live in LA, but I’m open to looking anywhere in Southern California if the numbers make sense.

I’ve been diving deep into learning house flipping and BRRRR, but I keep hearing mixed opinions—some say it’s still possible, while others claim the margins are too tight, interest rates are making it harder, and competition is tough. But I know there are people out there still making it work, and I’d love to hear from those of you actively doing deals.

• Are you still finding profitable flips or BRRRR deals? If so, where?

• Have you had to adjust your strategy given the market conditions?

• What’s been your biggest challenge lately?

• If you were starting fresh today, what would you do differently?

I want to go in with realistic expectations and take the right steps, but I also don’t want to overthink myself out of action. If you’re willing to share your experiences or insights, I’d really appreciate it.

Looking forward to learning from you all. Thanks in advance!

[Bradley Buxton]

@Lee Lance Leoncio

There are still BRRRR deals it takes more money and more effort to find them. The hunt-and-peck method is time-consuming. The successful in my market in Reno Tahoe are buying higher-end and always ready to buy when an opportunity arises. Many other people competing in that space for easy projects at below-market prices where the numbers make sense. The high interest rates make it harder to do a quick BRRRR and you may have to hold a bit longer. Your market will vary from others based on various factors like demand, inventory, and distress in the market.

[Rick Albert]

Some are still doing it. However, new laws came into play that if someone flips a home within 18 months of owning it, they have to provide contractor information, list of improvements, etc. The reason why this might change things is because some flippers were using handymen to do the work, not licensed contractors. When they present to buyers that they are spending $1M+ on a house that a handyman worked on, it may not go well.

If your goal is to truly flip, your best bet is to find direct Sellers who are willing to sell at a steeper discount than if they were to put it on the market. They are out there because they want cash, quick close, no inspections. 

The only properties I could see working (and if I really wanted to get into the flipping business) is to focus on properties with not just major deferred maintenance, but also unpermitted structures, bad foundations, etc. Things that scare most but you would be willing to take on. Even flippers don't want these but then wonder why they can't find deals. 

If you really wanted to take on more risk but could be profitable is buying properties with tenants in place and utilizing the cash for keys agreements to get them out. Extremely risky but possible. There was a flip near me where the flipper paid about $500K and sold for $930K and probably spent about $200K to renovate (no permits were pulled). 

Generally, the more work it requires, the more likely the discount is there to create some margin.