10 Housing Markets Under $250K Where BRRRR Still Works
Summary
This article discusses the viability of the BRRRR (Buy, Rehab, Rent, Refinance, Repeat) strategy in the current high-interest rate environment, focusing on sub-$250K housing markets. Hosts in these areas can potentially still utilize BRRRR by finding properties requiring minimal rehab and exploring creative ways to boost cash flow, even though it will be challenging.
Key Insights
- •The article highlights 10 metro areas with median listing prices under $250,000, offering a combination of affordability and stability, a rarity in the current housing market.
- •In higher-interest rate environments, the BRRRR strategy becomes more challenging and requires looking for multifamily deals requiring minimal rehab, with at least one livable unit, and tighter underwriting.
Action Items
- ✓Hosts considering BRRRR should be meticulous in budgeting and prepared to ride out the current interest rate cycle.Effort: mediumImpact: medium
- ✓Hosts should explore creative strategies to increase cash flow, such as renting by the room, mid-term rentals, targeting ROIs for bedroom additions, or charging for extras like parking.Effort: mediumImpact: medium
Common Mistakes
- ⚠A mistake is not accounting for the high interest rates which means that many of these properties could be negative in cash flow or break-even.
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