BiggerPockets

I am expanding my SFH portfolio (currently all in Wisconsin) and in the market for several turn key houses with strong cash flow.

Ideal candidates are bread and butter 3/2s in good neighborhoods of landlord-friendly and tax-friendly cities (no war zones).

Cash flow is my top priority but I still need at least average appreciation potential.

Each house should flow at least $135 after applying the 50% / 2% rule (NOE are 50% of rent; rent is 2% of total price + rehab costs).

The ARV equity spread should be at least 30% considering the full investment (price + rehab + closing costs).

Ideal properties will require no or minimal rehab work so I can avoid out-of-state rehab management complications.

Proven property management and contractors/handymen should be in place.

My exit strategy is to buy and hold for 5 years and then sell or lease option to a buyer.

I want to minimize out of pocket costs, so 100% seller-financed deals are #1. Deals where seller finances 25% of the down payment are #2. Option #3 is using 20% cash out of my pocket with a bank financing the rest.

Based on weeks of research on the BP forums/blogs and numerous discussions with fellow BP colleagues, here is the likely profile of my future houses (but I am open to other opportunities that fit my criteria):

-Price + rehab cost: $20k - $50k (it is tough hitting the 2% rule with higher priced houses)
-Rent: $500-$1000
-ARV value: $50k - $100k
-Location: Charlotte, Memphis, Dallas, Birmingham, Indianapolis, Atlanta, Jackson MS

Although these cities are on my radar, I will consider all good metro areas in the US with populations over 100,000.

Please post details here, e-mail me, or message me on BiggerPockets.

~Dave

I will take 5-10 of what David just posted for, and I'll pay cash... The wish list is really an extreme wish list in my mind. Where are Ty, and Stacy??/ Rich

Chris and Ty, I accepted your colleague requests so please send details.

Rich, what part of the request seems extreme? Or is it everything, in total? Over the past months, I've seen deals discussed here on BP that might be a fit.

Dave,

you wrote:

Stacy, here are some of the concerns that were raised:

"Homes in that neighborhood were built in the 1920s and are frame houses which are iffy in FL... if wind/flood/hurricane doesn't get them, termites will."

"Can get 2/2 block homes in West Pasco for same price and built in the 60s/70s... newer so fewer mechanical problems and no termite issues."

"Flood insurance might be needed and is costly."

"Pinellas County" has high taxes.

Like I said, the #s might work but the deal seems risky... let me know your thoughts. Thanks, Dave

What I have to offer in St. Petersburg, FL: $1,200 Rents, 65K Purchase price, 105K+ value. The home is completely renovated to pass section 8 inspection. Rents are sent directly to Investor. Property management is included for the first year.

I spoke to the seller to have him address your concerns. Here is his reply:

Wind/Flood/Hurricanes/Termites.

Termites are a concern wether block or frame. None of the homes in the St. Petersburg program are purchased in Flood areas, all are inspected and none are purchased if there is a termite problem. Mechanicals pass the section 8 inspection.

Please compare Pasco County flood areas, wind insurance and sink holes and do an apples to apples comparison regarding taxes. They are lower in Pasco Co but not enough to offset the sink hole, flood and wind insurance. If you really want a home in Pasco county then with a bit larger earnest money and no rent guarantee we can find you a Pasco county home.

As for risk, the program in St. Pete has been designed to limit your risk of negative cash flow, deferred maintenence and the stress of looking for a tenant. All of this is done while still putting more money in your pocket than just about any other deal I've seen.

Let me know your thoughts and if you want to come down to St. Petersburg to see the operation, I may put together a weekend seminar in the next month or two.

Stacy