BiggerPockets

Its going to depend a lot of how much rent you can get. In some places a $100K house is a tar paper shack that might rent for $700 or less. That's going to produce no cash flow at all. In other places, you might buy a quad that would rent for $500 a unit.

Lots of folks would and have argued its impossible to find "2%/50%" deals. In many areas, like Denver, I would tend to agree. But we do see deals like that crop here. There's even a group for that. So, it does appear than in the right location, you could really purchase properties for $25K and expect to get $500 in rent. With the 50% rule, you'll get NOI of $250/unit. So, you could buy four of them for cash with your $100K and be generating $1000 a month, $12,000 a year, in returns. That's 12%. Really, your investment would have to cover closing costs, so maybe you have $110K invested.

Alternatively, say you can get 70% LTV loans. Not easy for small loans like this, but say you can do it. Say its $2500 in closing costs and loan fees. So, you need about $10K each. Payment on a $17,500, 30 year, 6% loan would be $105 a month, leaving you $145 in cash flow. For the same $110K, you could buy 11 of these. That gives you $1595 a month or $19140 a year on your $110K investment.

Your total rent would be $5,500 a month. By doing your own property management, you could earn back the property management costs. These are all over the may, but 10% of collected rent would be a reasonable estimate. That's another $550 a month you can EARN doing the PM, or $6600 a year. That brings your total return to $25,740 a year.

Or, you could really put effort into finding properties you could acquire with little cash out of pocket. Subject to, lease/options, owner financing, etc. Build a good relationship with a small bank and work up to having a line of credit to buy and rent, then put them under a blanket loan. With a bunch of work, you could parley that $100K into a much larger set of properties.

The rules would allow you to sell the 11 SFRs and 1031 exchange them into one big one. But the timing rules are strict and actually making that work would be a challenge.

Nope, never done a 1031. Still on the small property stage of building a portfolio. I think you'd either need to move them as a portfolio to a single buyer, or do 2-3 into a single larger property. I think the time line is that you have 45 days after the sale (or first sale for multiple properties) to identify the three candidate properties, and then 180 days from the sale to close. I don't really know how the timing works if you're doing two into one, but I'm assuming the sale of the first would start the clock. You also have to close before you file your taxes for that year. That's just a matter of delaying filing or filing for an extension, but could trip you up if you're unaware.