All Forum Posts by: Michael Bayrakeri

Tips for repeatable BRRRRs (Buy, Rehab, Rent, Refinance, and Repeat)

It is not about "where you buy" but "what" and the "what" is "what you buy".

Most people don't know this but in real estate, you make your money on the purchase.

If you are buying at market value every time there is not enough margin to BRRRR.

My suggestions would be this:

1. Buy in areas that are landlord friendly.

2. Buy in areas that have strong demographics, a young population, and low unemployment.

3. Focus on buying off-market.

4. Build a database of contractors that can do renovations at the best price possible.

5. Have a financing strategy in place and know what guidelines you need to meet. (DM me for some specifics on this)

I hope those tips help.

*Feel free to add more

A guest of our recent podcast (also someone who was in CA and invested out of State) mentioned that he wouldn't go with turnkey providers as their offering is so broad that they aren't usually the best options for each specific task. That episode will be released in two days. I can share if you are interested.

If you hope to get positive cash flow immediately in the current environment, the markets and type of properties could be limited. 

Here are major considerations in evaluating different markets. You can search for "top XXX lists" from multiple sources.  However, I'm not aware of a tool that can give you all the answers. If that's the case, no investor will be able to outperform and gain high returns... 

• Your budget: are you looking to buy under $200K, $200-300K, $300-500K or higher? It can help you create a short list

• Population growth, employment growth, wage growth, composition of business types are the most important factors in the health of the market. There are many analysis, charts out there. Specifically. places where the millennials are attracted to are interesting as they are becoming the biggest renter and homebuyer group

  (Note: Be careful with 'historical' data. The top growing markets in the last 2 years are unlikely the most sound choices. Good examples are Austin and Phoenix. Try to add the futuristic lenses into your analysis whenever you can. In the ideal case, there be a "new California" emerging somewhere in the next 10 years. But to be frank, CA's trajectory is impossible to replicate as working remote has become more prevalent, companies more “decentralized”, and more people think about not just professions, but also lifestyles these days).

• Are you able to find trustworthy realtors/PMs or even service providers? Do not get into a market before you know whom to work with. Many investors interview many to find the best one. In my case, I started in the Houston area as my friend had very good recommendations for me. So use your network to get more ideas!

• Run the numbers to understand the cash flow, and pay attention to the major cost such as the effective property tax rates. It typically range from 0.5%-2%+

• Rental regulations as some States are more friendly to renters while some more friendly to investors

• Distance to you. If you find a good area 2-5 hours drive from you, it’ll be easier to meet your team and check out the properties in person

• Certain hazards or costs that you want to avoid. Drought, flooding, snowstorms, tornados, just to name a few

Some other considerations:

• Form an opinion about where you'd like to live in the future, and factor that in. Even if you work with PMs, being close to your properties will still be a plus.
• Also decide whether cash flow is most important for you, or good enough cash flow with less hassle, higher quality tenants, or even appreciation potential. That will determine the type of properties and the price range you want to focus on.

Hey Michael,

I live in California as well and I own 12-doors in Detroit. I spent 2017-2022 living in the Detroit area building my network and portfolio. 

I'm still investing there even though I'm now back in CA. I also help others do the same and happy to discuss if you'd like.

I would recommend you to select your market first. 

A market with steady job growth, population growth, low vacancy, job diversity, landlord friendly,....

After that, build your team and search for an investor-friendly agent in this market

Hey @Michael Bayrakeri, if you are interested in the Phoenix market there are turn key options with property management in place through my brokerage.