All Forum Posts by: Jonathan Oh

@Adrian Jenkins

a) buying in a place I’ve never been to - Order appraisal and inspection. These should give you the comfort of know that property exists and the overall condition of the house.

b) not being able to tell what part is good or bad - I am assuming your are talking about neighborhoods. For a start you can look at different stats like crime, owner-occupant %, income, etc.. You should also give a few PMs a call and ask them about it.

c) not being able to tell if I’m being taken advantage of by a local real estate agent - Vet them and use referrals. Meet with them if you can.

d) since I work a 9-5, I’ll hardly ever go out to visit - I have rentals that I have never visited and never had to. Leave the day-to-days to PMs. Even if I had a rental down my block, I would prefer to have someone else handle the midnight plumbing calls. Technology has improved and has made managing rentals remotely much easier too.

If you need some help with the research, message me and i'll gladly help.

1 Vote

@Xiaoyi Yu I don't see a problem with that. Whether its a PM who is also a realtor or just a PM, it will be a hit or miss because there are so many bad PMs out there. If the realtor is also a PM, he may also have better insights into rents.

0 Votes

@Jake Rhodes

BRRRR is an incredible way to scale quick unlike turnkeys. Beauty of BRRRR is to be able to get most or all your money out and into the next deal. But beware, it's not as simple as reading a few books and then pulling off a successful BRRRR. You need to build a strong team. Understand how to analyze deals, how to calculate ARVs accurately, how to manage contractors, etc.. I would suggest practicing analyzing deals and reading up on stories here on BP.

Turnkey is "safer" given that you do your hw. It is perfect for people who don't have the time or desire to go through all the hurtles of BRRRRing. You are buying at market price, so very little room for immediate equity growth. But you will still be cash flowing. Scaling on turnkeys will be much harder than BRRRRing.

I invest in turnkeys as well so feel free to reach out to me for more questions!

2 Votes

100% not a flip. You have $100k in debt. I don't think it's a good idea to get into even more debt to pull off a flip in a hot market with tons of competition and with no experience. Wholesaling is much safer and can be very lucrative as well.

1 Vote

@Max T. Ok I see, I was thinking you just recently bought this property. Awesome man!

0 Votes

@Stefan D. Will this be you're first BRRRR? This is a very risky strategy when done remotely. I encourage you to go at it if this is what you want, but just beware that it is not as simple as reading a few books and pulling off a perfect BRRRR. If you have the time and drive, I am sure you can figure it out. If not, like @Nicholas Parish said, turnkey is a great option as well.

1 Vote

Kansas City, Missouri

@Max T.

80%+ appreciation with very minor repairs? I think one key info you left out is neighborhood and when you purchased this.

0 Votes

Originally posted by @StevieAnn Nance:

It's a great tool but there are plenty of downfalls, absolutely! Like all tools, you need the right one for the job.

BRRRR-ing a property comes with additional timelines. It may take you 3, 6, 9 or 12 months to complete the rehab on the property. What's the opportunity cost of your time for that 12 months? Would it have been easier to just purchase a turn key property and save up your own personal cash reserves from other income sources (job etc) for that same timeframe? When analyzing a property, consider the "time opportunity cost."

If you over run your budget on a BRRRR, this opportunity cost looks bleaker. It becomes less of a BRRRR and more of a learning opportunity! It depends a lot on your own personal abilities and the numbers of the property and rehab.

That said... I'm a big fan of BRRRR & learning opportunities! There is no method of investing, no method in life that is "perfect" and free of problems or downsides. Just pick one, do your research, do your research a 2nd, 3rd & 4th time and go for it!

100% agree. Not a lot of people, especially new investors, consider opportunity cost. I've seen new investors who have a great career with a high pay wanting to learn how to do BRRRR by themselves. They had no idea of the time commitments.

1 Vote

Originally posted by @Jay Hinrichs:

Originally posted by @Alexander Felice:

First, I love having the opportunity to disagree with @Jay Hinrichs on this because I have had a LOT of success with BRRRR as an out of state investor and it's been pretty easy for me! ;) ;)

that said, after doing 8 of them I've learned a lot and gained perspective that I didn't have when I was new.

This process absolutely has flaws, to name a few:

1. it doesn't scale at all

2. it only works in certain geographic markets

3. it usually only works on cash flow houses leaving you out of appreciation gains (the real money maker in RE)

4. it ONLY works when buying distressed properties. People try to buy retail for BRRRR and that's just desperation

5. it's NOT as passive as people wish it was. You trade managing tenants for managing property managers

I have only been successful at BRRRR because I bought my first one in 2014 when the market was still quite depressed. don't get me wrong it can be a great way to get started, I just finished my last one, but use it as a stepping stone, not an end game.

I look at it as hype.. people have been renovating and refinancing since refinances and renovations were done in the us probably in the late 1800s so no mystery there.. What I see is this is being sold kind of like any other guru program its sells a book that sells the theory and in theory for sure it all works .. just like in theory you can build a monster portfolio with none of your own money like the gurus say .. or you can snap flip and make 100k a month wholesaling with none of your own money.. or the guys are hitting the tax overage stuff hard again on social media.. it all works in theory.

And for those that have the time energy and some experience I can see it working for them to.. but you sell this concept to brand new investors and I can just flat guarantee there are going to be a lot of folks that wish they never heard the term BRRRR.

In our BRRRR days it worked because we were the gate keeper for the investors.. HUGE difference..

Hype seems to be what gets a lot of newbies in trouble. Read a book or two and then all of sudden they think they're a pro.

1 Vote

@Christopher Raney

Southeast is a very broad region. I think you should first figure out which market you want to go into and then decide on the turnkey company from there. Property managers are market specific as well, so no one will be able to help you out there until you choose some markets. I invest in turnkeys as well, so let me know if you have more questions! I'd be glad to help!

0 Votes

All Forum Posts by: Jonathan Oh

Jonathan Oh has started 3 posts and replied 351 times.

Post: Horror or Great stories for out of state newbie investors?

Post: Should I use same person as both realtor and property manager?

Post: BRRRR vs TurnKey - Which makes more sense?

Post: Im 28 and $100k in student debt

Post: Second Investment Deal

Post: New investor in KCMO introduction

Post: Second Investment Deal

Post: BRRRR Method Downfall

Post: BRRRR Method Downfall

Post: Turnkey investment properties