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Cash flow properties, need advice on what cities to look

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Chris Clothier Donor

Real Estate Investor from memphis, Tennessee

Feb 07 '13, 10:13 AM


@Mary Joe - I really like the Memphis market, the Dallas/Ft. Worth market for long-term buy/hold markets. I am also starting to invest in Nashville in Tennessee and researching Austin and Houston over in Texas.

Your question about Cash Flow has a lot of other detail that you should consider and maybe share before really knowing a market that fits your goals. Are you talking Cash Flow as a creation of using leverage? If so, you can find cash flow just about anywhere. It all depends on what price point you are looking at, what your risk tolerance is and how much you are willing to put down. I have been researching markets for a long time and thru my success and failure I have come to learn that the properties themselves and finding someone to help you if you are investing out of area are really secondary to researching a good market that fits your long term goals.

Every market is going to offer something a little different whether it is good opportunity in SFR or multifamily or good opportunity for short term investing while others are good for long term investing. You really have to know what your expectations from investing are and then find a market and/or strategy that fits those goals.

Good luck with your investing - Chris



Medium_new_mi_logoChris Clothier, Memphis Invest, GP
Telephone: 901-212-9647
Website: http://www.memphisinvest.com
www.MemphisInvest.com 1(877)-773-9998 Chris D Clothier


Sergiu Spinu

Real Estate Investor from Pittsburgh, Pennsylvania

Feb 08 '13, 12:45 PM


Pittsburgh is a very great place to invest

I have a few properties.....

Last year i bought a property for 13k + 3K repair 4 br brick house that i rent it for $750 a month.Yes the area is not one of the best but hey look at the numbers........I still do not have any problems with my section 8 tenants:)



David Niles

Real Estate Investor from Buffalo, New York

Feb 08 '13, 01:08 PM


Originally posted by Joseph M:
Yeah that is true , some of the taxes are definitely insane in NY...but it does seem that despite that people are able to cashflow on properties in Rochester,Buffalo, and other areas around there.

The city taxes are a fraction of the suburbs and why lower income city rentals cash flow nicely.

Originally posted by Stephen Masek:
The US side was a downright disgrace compared to the Canadian side when we visited in 2008. We were shocked.

Still not much better now Stephen, the casino was supposed to help but hasnt done much besides help itself, commercial and residential throughout that area are still boarded up.

The US side had gone the quick cash industrial route many many years ago and now pays the price, the Canadians took the slow growth tourism way and are a real sparkling gem.



David Niles

Real Estate Investor from Buffalo, New York

Feb 08 '13, 01:15 PM


We do doubles in the city all day long for $35-$45k, average is $500-$600 per unit depending on area and quality of units, so $1000-$1200 monthly.



Mary Joe

Brooklyn, New York

Feb 08 '13, 02:11 PM


Thanks all for the feedback.

With these low cost ($20K-$30K range) properties that CF, it seems that most landlords are not concerned whether the tenant has any savings in the bank as long as they have income verification and pass the credit and background check, am I correct?

I am very new to this type of investment, the ones I currently rent out I always require that besides the typical income/background/credit check, the applicant must also provide bank statement for the past 3 months showing a savings of at least 9 times the monthly rent. Based on me and my brother's research, it seems that most landlords for these type of ppty are not concerned that the tenant is living from paycheck to paycheck, am I correct?

Do you guys see very high turnover with tenants who live paycheck to paycheck?

I am taking notes of all the different areas you guys suggested, will get myself organized and get in touch with you all for further details shortly.

Thanks
MJ



Jon Holdman Moderator

SFR Investor from Wheat Ridge, Colorado

Feb 08 '13, 02:20 PM


Originally posted by Mary Joe:
Originally posted by @Dean Letfus:
In Memphis the 60 to 90K market is very solid. Rents at the price will be from $875 to $1350 a month

Thanks Dean, what neighborhood in Memphis should I look at?

Dean Letfus, please reply here in the thread.



Jon Holdman, Flying Phoenix LLC


Dean Letfus

Real Estate Investor from Memphis, Tennessee

Feb 08 '13, 02:24 PM


Love to Jon but it's not possible. Memphis is so spotty it comes down to streets and even ends of streets. The only zip codes that are 100% ok are not investor areas.



Mary Joe

Brooklyn, New York

Feb 08 '13, 02:34 PM


Originally posted by @Chris Clothier:
Mary Joe - I really like the Memphis market, the Dallas/Ft. Worth market for long-term buy/hold markets. I am also starting to invest in Nashville in Tennessee and researching Austin and Houston over in Texas.

Your question about Cash Flow has a lot of other detail that you should consider and maybe share before really knowing a market that fits your goals. Are you talking Cash Flow as a creation of using leverage? If so, you can find cash flow just about anywhere. It all depends on what price point you are looking at, what your risk tolerance is and how much you are willing to put down. I have been researching markets for a long time and thru my success and failure I have come to learn that the properties themselves and finding someone to help you if you are investing out of area are really secondary to researching a good market that fits your long term goals.

Every market is going to offer something a little different whether it is good opportunity in SFR or multifamily or good opportunity for short term investing while others are good for long term investing. You really have to know what your expectations from investing are and then find a market and/or strategy that fits those goals.

Good luck with your investing - Chris

Thanks Chris ,

-I am flexible on price point from $20K to $400K or may be higher depending on how attractive the investment is,

-I am conservative, long term buy and hold type of investor, want STABLE tenants,

-flexible on financing, may do all cash for out of state properties depending on the numbers etc,

-am hoping for about 10% or more return on my cash investment,

-prefer multi family in order to take advantage of economies of scale,

-I understand the appeal of these low cost ($20-$30K) homes, but if it means having to purchase 10 of these homes and deal with 10 different tenants in order to generate say $30K cash flow per year (hypothetical number), then I think it may not be appropriate for me.

- The maximum number of tenants I would like to deal with is probably 4 at most, are there any 3 or 4-family homes that can generate $30K-$40K or more a year in cash?

-Nothing in my area CF, so I am open to out of state properties.....



David Niles

Real Estate Investor from Buffalo, New York

Feb 08 '13, 02:37 PM


With our low end income stuff Mary Joe, its more about the criminal background check as most are section 8 and the state guarantees the monthly check. We do screen as best we can still with an extensive application and small fee to weed out even more.



Dean Letfus

Real Estate Investor from Memphis, Tennessee

Feb 08 '13, 02:39 PM


Getting you 10 % genuine net unleveraged is super easy in Memphis Mary. Even higher end homes in white collar streets we can get that!



Joshua Dorkin Verified Donor

BiggerPockets Founder from Denver, Colorado

Feb 08 '13, 02:42 PM


Folks - I have no problem with you talking about cities and other details, but please refrain from any form of solicitation or dealmaking here or your posts will be removed. Thank you.



Medium_bp-squareJoshua Dorkin, BiggerPockets
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Chris Clothier Donor

Real Estate Investor from memphis, Tennessee

Feb 08 '13, 03:06 PM


@Mary Joe - When I read back thru your thread it sounded like you may be leaning toward self management (you mentioned preferring tenants who will do direct deposit). I'm not sure if that is the case or not. Let us know if that is correct and I can share some questions to ask when it comes time to locate properties.

There have also been a lot of comments here mentioning price and you noted several questions about lower prices. If you are a conservative investor and looking for stability rather than simply a nice looking paper return, in my opinion you do not need to be looking at the low price points. I personally would prefer that an investor looking at a very low price point that comes with a lot of challenges be a local investor who fully understands those challenges. That would be my personal advice for someone asking me about buying that price point in Memphis. I don't deal on the lower end of the price range anymore just due to inconsistent occupancy and on-going maintenance that usually occompanies a super low price point.

If you are open to a higher price point (you mentioned $400K) and are not married to the idea of single family homes, I would reach out to @Joel Owens. He commented on this thread earlier about Atlanta. he is a great resource for investing in multi-family and commercial and was very helpful to me when I reached out to him with questions.

As far as Memphis and Dallas, the two markets I know best from my companies, I know you can reach your goals. They are stable markets from a long-term economic standpoint which is important for an investor looking to use the buy/hold strategy. As far as the multi-family opportunities, I like Dallas, though I'm not as enamored with those opportunities in Memphis even though they do exist. They simply come with a lower rental rate and tenants who can only afford lower rental rates tend to present another unique set of challenges. I simply like SFR's in both cities, but I too am reviewing the opportunities that multi-family present in both cities.

Whew! That was long! Your are doing great by looking around and asking for feedback. As you really start to narrow down, don't hesitate to ask any other questions on specific markets, companies or even properties as you get ready to buy.

Best of luck to you - Chris



Medium_new_mi_logoChris Clothier, Memphis Invest, GP
Telephone: 901-212-9647
Website: http://www.memphisinvest.com
www.MemphisInvest.com 1(877)-773-9998 Chris D Clothier


David Niles

Real Estate Investor from Buffalo, New York

Feb 08 '13, 03:11 PM


Price increases for the 3 and 4 family units with less available. Did a 3 unit for an investor recently but his costs for purchase and us to rehab were probably closer to $60k. Front upper and lower were left rentals, back unit we turned into owner townhouse.



Robert Adams Donor

Real Estate Investor from Las Vegas, Nevada

Feb 16 '13, 04:46 PM


We have been helping investors from all over purchase positive cash flowing properties here in Las Vegas. With the low inventory here prices have been climbing which in turn reduces your monthly cashflwo but even so it it still positive. Cap rates a year ago were 11%- 12% all day long. Now you are looking closer to 8% most of the time.

Hope this helps give some insight as to the Vegas market.



Medium_rothwell_gornt_logo_smallRobert Adams, The Adams Team at Rothwell Gornt Co.
E-Mail: [email protected]
Telephone: 702-349-9175
Website: http://www.LVrealestateHELP.com
Broker (Las Vegas NV) (Massachusetts) & (Rhode Island) MArealestateHELP.com RIrealestateHELP.com


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