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A young investor who described himself as a "big stock market guy" recently turned to Reddit looking for advice on a problem many aspiring real estate investors are facing.
After building up money in the stock market, he wanted to start buying rental properties using the popular strategy of buy, rehab, rent, refinance, repeat, or BRRRR. The approach involves purchasing a property, renovating it to increase its value, renting it out to generate income, refinancing to recover invested capital and then repeating the process with another property.
Instead, he found himself struggling to locate deals that made financial sense.
"I am looking to become a real estate investor with some of the capital I have acquired recently so that I can eventually work for myself and quit my job," the young investor wrote. He added that he was drawn to BRRRR because "the idea of recycling capital and scaling over time is really attractive to me."
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Why Investors Say BRRRR Has Changed
The BRRRR strategy became popular because it allowed investors to recover most or all of their original investment after renovating and refinancing a property.
But many experienced investors told the poster that the market has changed.
Several investors mentioned the Multiple Listing Service is no longer the place where investors regularly find great BRRRR opportunities.
"MLS is basically a wasteland for BRRRR right now," one investor wrote. "I've had way more luck focusing on probate leads. most of those folks just want to offload the property fast and don't care about getting top dollar, which is perfect for finding that equity."
Others argued that real estate investing today is less about scrolling through listings and more about finding opportunities before they reach the open market.
"Real estate is a sourcing and operations game, not a screening game," one commenter explained. "The returns live in deal flow and managing the rehab/tenant, not in picking the right asset off a screen."
Many investors said their best deals now come from wholesalers, probate leads, direct mail campaigns, investor referrals and local networking.
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