Updated almost 4 years ago on . Most recent reply
Looking for first investment in Toledo-- should I look elsewhere?
So for the past two months I've been learning as much as I can about real estate.
I've been listening to the Bigger Pockets podcast, I've read (Multifamily Millionaire Vol. 1, Investing in Real Estate with No and Low Money Down, Rich Dad Poor Dad, Cashflow Quadrant), currently reading (the Book on Estimating Rehab Costs, the Miracle Morning), and have a few real estate books I bought to read after. I am also talking to a friend a couple years ahead of me in the investing game.
After I read my first book (Investing with No and Low Money Down) I began my search for a first property and decided to focus all my attention towards a single market. I decided on Toledo, OH (I am living in CA) as I found a really helpful real estate agent who also invests (in Toledo for both) through BP, and he presented the market as great for cash flow (not appreciation as of now). He gave me every contact he had for a team in the area (PM, insurance, lender, etc.). Also, C and B class properties aligned with my beginners budget of $20k-30k including closing costs and rehab.
However, the leads I am getting through the MLS are not presenting great cash flow after inputting all the factors into the BP rental calculator. It always comes to around $50-150/ month pure cash flow for SFM and duplexes that I can afford, with 3-8% CoC Return unless I drive the asking price $10k-20k lower than asking.
Questions:
- Should I look towards a new area to invest in (or look in more than one at the same time) (keep in mind as someone who has yet to invest in property)
- Find alternate ways to find leads in Toledo (ideas are welcome-- currently using MLS only)
- Continuing looking and saving money from my job to increase quality of property I can purchase
I am trying to avoid analysis paralysis, but don't want to lose every penny I have on a bad deal (my budget is what I have). Willing to hear all advice and be patient, but just want to hear it from someone else. I really do want to get started and be an actual investor. Thanks everyone!
Most Popular Reply
You should not consider any Toledo deal that cashflows less than $300. The average cashflow in our brokerage portfolio is well over $500 per building. We always hit the 1% rule in this market and usually are closer to 2% without compromising on our strict neighborhood criteria. I would re-evaluate your process.