All Forum Posts by: Nicholas L.

@Celine Li

out of state BRRRR is a difficult way to get started. in state BRRRR is tough! I did one last year that was an hour away from me, and it was a huge, huge pain. to do an out of state BRRRR you have to do the following remotely (somehow):

-find a deal that is exactly the right amount of distressed - needs a big rehab, but can be salvaged and fixed up.  these deals aren't on Zillow - they're usually off market.

-find a contractor that is high quality, willing to take on your rehab, not booked up for the next year but also not available right away.  then manage them remotely.

you also noted you want an STR, which is going to shrink the inventory that is viable for you and also increase the amount of competition you have.

you may want to read these threads:

https://www.biggerpockets.com/forums/12/topics/1215726-break...

https://www.biggerpockets.com/forums/48/topics/1159104-overl...

https://www.biggerpockets.com/forums/963/topics/1195280-expe...

https://www.biggerpockets.com/forums/48/topics/1160450-run-i...

https://www.biggerpockets.com/forums/48/topics/1137397-balti...

i invest in Pittsburgh, and I would tell you: DON'T invest in Pittsburgh unless you're willing to come here in person and build your network.  buy on the wrong street and you'll lose money.

hope this helps - have done some BRRRRs here and happy to help further.  nothing to sell - not an agent - not an anything

@Yents Ybrimovic

hi - way too complicated when you're just starting out

just save up enough to do your own house hack

good luck

@Mike Sfera

not sure i follow what you're asking. yes, if you buy something that's intended to be a rental but needs to be fixed up, you won't get rent while it's being rehabbed. i think of that as 'holding costs' rather than lost rent. and yes, of course your budget needs to be able to factor that in. that sounds like a BRRRR.

but let me know if that's not what you're asking.

@Blake R.

start with a house hack

@John Postma

i'd post your questions here just like you're doing, and also go to meetups and network with local investors.  maybe you can form your own mastermind / small group of local people in your same situation and work on strategies together.

I think @Marcus Auerbach totally nailed it.  cash flow is just tough today, and investor sentiment hasn't caught up with the market yet, as lots of new investors come on to BP every day planning to buy 5 properties in the midwest and quit their jobs.  it's not happening.

now, equity can be turned into cash flow, by refinancing or selling.  it's just a longer time horizon.

@Radhika S.

you are right to be cautious.  'cash flow' has been way, way oversold.  it typically takes 5-10-15 years to stabilize a property, get a good tenant in, and actually generate net cash flow, especially with prices and interest rates so high.

if you're in it for the long term, and willing to weather some early storms, great.  but if you want immediate cash flow - you're better off in a savings account.  

https://www.biggerpockets.com/forums/12/topics/1215726-break...

https://www.biggerpockets.com/forums/48/topics/1159104-overl...

https://www.biggerpockets.com/forums/963/topics/1195280-expe...

https://www.biggerpockets.com/forums/48/topics/1160450-run-i...

https://www.biggerpockets.com/forums/48/topics/1137397-balti...

@Zechariah Troth

hello.  this question gets asked a lot.  here's a good thread on it:

https://www.biggerpockets.com/forums/899/topics/1110473-sett...

you should do your own research and determine what fits best for you.  i do not think it is necessary for your first few rentals.  but that is just my opinion.

@Jonah Gunalda

not sure if you were asking these questions rhetorically but i thought they were good so here goes.

1. Do you have any personal experience in investing in indications and that’s why you choose to not/no longer invest this way?

I have no experience in syndications, and as I stated in a previous post, I am mostly not interested.  In addition to direct real estate, I invest fairly heavily in index funds.  I seem to have timed some REIT investments well too - nothing I did, just classic DCO.  In a syndication you have low control and also limited liquidity.  I want either full control - an individual property - or total liquidity - a REIT or index fund.  Maybe many years out I'd be more interested, but it doesn't fit what I am trying to do right now.  (I'm not trying to talk you out of it!)

2. Do you currently work a full-time job as I do, or is real estate your full-time gig? If you do work full-time, how much of your real estate investing (including BRRRRing properties if you own rentals) occupies your time?

I work 9-5 and invest in real estate 5-9.  I have a portfolio of LTRs in 3 states.  I try to do 1 BRRRR a year but have not been able to get one in 2024 because I keep being outbid.  My portfolio is stabilized and while it's not totally passive, I have strong PMs in place.  I spend a few hours a month paying bills, answering questions from my PMs and approving large bids, and then occasionally handling a turnover.  I have taken all my taxes and insurance out of escrow, and I run them through credit cards to rack up points, so I pay a lot of bills every year.

3. Are you primarily motivated by the idea of ownership in the assets rather than someone else owning and managing it?

Yes, exactly.  

@Evan Polaski

you nailed it - control and liquidity.  i want at least one (right now.)

@James Wise

yes sir - i want to hear OP explain it to me.

i have a hard time managing them one hour away!

@James Wise

can we add - be willing to be in it for 5-10-15+ years to weather those early storms?

i keep seeing:

1. buy out of state rental in a solid neighborhood with long-term potential (just as you are recommending) but then...

2. have one rough tenant turn that costs a couple grand, and

3. give up on real estate investing, and turn on everyone involved in the transaction for not guaranteeing that sweet cash flow in month 1