All Forum Posts by: Rajshekar Manaliker

@Rajshekar Manaliker I’m here in south Florida and we’re still moving and shaking with a good amount of incoming residents from income tax paying states

Quote from @Rajshekar Manaliker:

Hello Everyone, 

I am a resident of Washington State but I am looking out for leads and suggestions on which states are good for BRRRR to invest in. If Yes, how feasible or best way possible to judge the property and analyze the repair cost and be successful?

 Getting a team together. Should start with a realtor, and then the realtor you choose should have contacts to get that done

@Rajshekar Manaliker 

Recommend you first figure out the property Class you want to invest in, THEN figure out the corresponding location to invest in.

When investing in areas they don’t really know, investors should research the different property Class submarkets. If you apply Class A assumptions to a Class B or C purchase, your expectations won’t be met and it may be a financial disaster.

Our OPINION for the Metro Detroit market (always verify each area for yourself!):

Class A Properties:
Cashflow vs Appreciation: Typically, 3-5 years for positive cashflow, but you get highest relative rent & value appreciation.
Vacancy Est: Historically 10%, 5% the more recent norm.
Tenant Pool: Majority will have FICO scores of 680+, zero evictions in last 7 years.

Class B Properties:
Cashflow vs Appreciation: Typically, decent amount of relative rent & value appreciation.
Vacancy Est: Historically 10%, 5% should be applied only if proper research done to support.
Tenant Pool: Majority will have FICO scores of 620-680, some blemishes, but should have no evictions in last 5 years

Class C Properties:
Cashflow vs Appreciation: Typically, high cashflow and at the lower end of relative rent & value appreciation. Can try to reposition to Class B, but neighborhood may impede these efforts.
Vacancy Est: Historically 10%, but 15-20% should be used to also cover tenant nonpayment, eviction costs & damages.
Tenant Pool: majority will have FICO scores of 560-620, many blemishes, but should have no evictions in last 2 years. Verifying last 2 years of rental history very important! Also, focus on 2 years of job/income stability.

Class D Properties:
Cashflow vs Appreciation: Typically, all cashflow with zero or negative relative rent & value appreciation
Vacancy Est: 20%+ should be used to cover nonpayment, evictions & damages.
Tenant Pool: majority will have FICO scores under 560, little to no good tradelines, lots of collections & chargeoffs, recent evictions. Verifying last 2 years of rental history and income extremely important to find the “best of the worst”.

Make sure you understand the Class of properties you are looking at and the corresponding results to expect.

PM us if you'd like more info:
@Michael Smythe

Quote from @Rajshekar Manaliker:

Hello Everyone, 

I am a resident of Washington State but I am looking out for leads and suggestions on which states are good for BRRRR to invest in. If Yes, how feasible or best way possible to judge the property and analyze the repair cost and be successful?

Hi Rajshekar, I personally love Columbus Ohio and as someone who works with a lot of out of state investors - there's so many catalysts for why you should invest here. Specifically, there's job growth (Intel, Honda, Amazon, Nationwide, etc) and the population is growing (unlike Cleveland or Cincy). I really see Columbus Ohio as an extremely safe bet for the next 10-20 years. Plus, there's still so many positive cash flowing and 1% deals here in Columbus Ohio. As a local investor and agent here in Columbus, let me know if you have any questions or want to connect!

Quote from @Rajshekar Manaliker:

Hello Everyone, 

I am a resident of Washington State but I am looking out for leads and suggestions on which states are good for BRRRR to invest in. If Yes, how feasible or best way possible to judge the property and analyze the repair cost and be successful?

Hey Rajshekar, if you're looking for affordable markets with BRRRR opportunities, I would also suggest checking out the Midwest markets. Ohio specifically has some great BRRRR markets. And to reiterate, building your out-of-state team is going to be vital to your success investing OOS. Having a reliable PM and contractor to assist you in analyzing deals will help you run more accurate numbers.

Hey Rajshekar, I'm a big advocate for Detroit and own 14-doors there.

I just finished a duplex and am closing on my DSCR loan this week. But I also do a lot of SFH's and have a great ground team.

Happy to send you some resources on Detroit if you're interested. It's a great market but you really need to understand it or work with a strong team that does.

@Rajshekar Manaliker It is interesting that so many people who do not invest out of state will tell you not to invest out of state. The biggest and most successful investors all invest in multiple markets. Please do not fall into the trap of you need to invest locally. Is it harder to invest OOS, of course it is but it is 100% doable. What is important is building the team in the market you choose to invest in. You absolutely CAN do this without ever going and visiting the market you choose. It is about building relationships and networking.I get why people will say invest in your own backyard but that is NOT the only way, investing where you live does not guarantee success, you can still buy bad deals that don't cash flow or won't appreciate right where you live! Gaining knowledge and working with an experienced team is how you get success no matter what market you are in.

Quote from @Rajshekar Manaliker:

Hello Everyone, 

I am a resident of Washington State but I am looking out for leads and suggestions on which states are good for BRRRR to invest in. If Yes, how feasible or best way possible to judge the property and analyze the repair cost and be successful?

 Ohio, 

@Rajshekar Manaliker

i'm with @Jay Hurst

those low midwest prices look great.  but you know what else they come with?  low ARVs.

here in Pittsburgh you can buy a single family home for 25K, put 100K into it, and the ARV will be... 100-125K. that ain't a BRRRR.  that's a gift to the City.

in WA state the purchase prices are higher, but so are the potential ARVs.

go watch every single one of Tarl Yarber's YouTube videos on flipping and BRRRRing in WA and then come back here with questions.

good luck

Quote from @Rajshekar Manaliker:

Quote from @Jay Hurst:

Quote from @Rajshekar Manaliker:

Hello Everyone, 

I am a resident of Washington State but I am looking out for leads and suggestions on which states are good for BRRRR to invest in. If Yes, how feasible or best way possible to judge the property and analyze the repair cost and be successful?

 My opinion, in your case in would be Washington state. If you lived in Texas then it would be Texas, if in Maine then Maine and so on. Managing a rehab from a far in a market you do not know is a recipe for disaster. 

Thank you Jay for your advice, I always wanted to buy in the same state but Washington has been a little tricky when it comes to BRRRR properties to find.

 yeah I get it but there is no magical market. I have seen west coast buyers buying in cheaper states just because it is cheaper. But the risks do not change but you are a 1000 miles away. Contractors know that. It does matter.