Is positive cash flow a myth in today’s environment?
Member since 2022 · 4 posts · 5 votes
Is positive cash flow a myth in today’s environment?
Most Popular Reply
Joe VilleneuvePro Member
Plymouth, MI · Member since 2013 · 13k+ posts · 19k+ votesThere are positive CF deals everywhere, but that doesn't mean all deals will cash flow. Also, if it doesn't have positive CF, why would you buy it? The goal isn't to buy properties.
48 Replies
Quote from @Eliott Elias:
Not a myth, you have to buy right. Price/rent ratio has to be good. Look into Sunnyside and 3rd ward, renting by the room or airbnb.
People airbnb in Sunnyside or 3rd ward? You're better off at Palace Inn in the Heights.
Those two neighborhoods are neck and neck with Baytown in the grimiest areas of greater Houston, just FYI. As for cash flowing in Houston, yeah with interest rates high, taxes high, and population growth high, it's going to be really tough to cash flow. It hasn't really gotten cut off from a market demand standpoint. I don't think it really will. Texas is in such great demand, it'd be a hard route to deter from for the average US homeowner due to politics, and hard to deter from cash buying investors due to appreciation and market demand. It's not friendly to leveraged players unless you go into really crap areas. But then you're not getting the upside of what you're really wanting. Making $200/mo to get your "investment" property in Sunnyside part of Houston is nowhere near worth the stress of it. Get me $200-$400 in solid, appropriate areas of town. Only way to do that is put a higher downpayment. I don't recommend "waiting" if you're able to invest right now, timing is never predictable. Infact, the process of this difficult search may take you few weeks, if not months.
- Investor · Austin, TX · Member since 2021 · 9k+ posts · 5k+ votes3y
Quote from @V.G Jason:
Quote from @Eliott Elias:
Not a myth, you have to buy right. Price/rent ratio has to be good. Look into Sunnyside and 3rd ward, renting by the room or airbnb.
People airbnb in Sunnyside or 3rd ward? You're better off at Palace Inn in the Heights.
Those two neighborhoods are neck and neck with Baytown in the grimiest areas of greater Houston, just FYI. As for cash flowing in Houston, yeah with interest rates high, taxes high, and population growth high, it's going to be really tough to cash flow. It hasn't really gotten cut off from a market demand standpoint. I don't think it really will. Texas is in such great demand, it'd be a hard route to deter from for the average US homeowner due to politics, and hard to deter from cash buying investors due to appreciation and market demand. It's not friendly to leveraged players unless you go into really crap areas. But then you're not getting the upside of what you're really wanting. Making $200/mo to get your "investment" property in Sunnyside part of Houston is nowhere near worth the stress of it. Get me $200-$400 in solid, appropriate areas of town. Only way to do that is put a higher downpayment. I don't recommend "waiting" if you're able to invest right now, timing is never predictable. Infact, the process of this difficult search may take you few weeks, if not months.
Rookie, if you're putting more down to cash flow you're not buying the right deal. Sunnyside and 3rd ward are areas you can cash flow $500 a month plus with 15% down. I wouldn't live there, but i buy there.
- Slumlord, you're taking dimes to get crushed by dollars later. Investing in sunnyside is just a disaster waiting to happen.
Quote from @Eliott Elias:
Quote from @V.G Jason:
Quote from @Eliott Elias:
Not a myth, you have to buy right. Price/rent ratio has to be good. Look into Sunnyside and 3rd ward, renting by the room or airbnb.
People airbnb in Sunnyside or 3rd ward? You're better off at Palace Inn in the Heights.
Those two neighborhoods are neck and neck with Baytown in the grimiest areas of greater Houston, just FYI. As for cash flowing in Houston, yeah with interest rates high, taxes high, and population growth high, it's going to be really tough to cash flow. It hasn't really gotten cut off from a market demand standpoint. I don't think it really will. Texas is in such great demand, it'd be a hard route to deter from for the average US homeowner due to politics, and hard to deter from cash buying investors due to appreciation and market demand. It's not friendly to leveraged players unless you go into really crap areas. But then you're not getting the upside of what you're really wanting. Making $200/mo to get your "investment" property in Sunnyside part of Houston is nowhere near worth the stress of it. Get me $200-$400 in solid, appropriate areas of town. Only way to do that is put a higher downpayment. I don't recommend "waiting" if you're able to invest right now, timing is never predictable. Infact, the process of this difficult search may take you few weeks, if not months.
Rookie, if you're putting more down to cash flow you're not buying the right deal. Sunnyside and 3rd ward are areas you can cash flow $500 a month plus with 15% down. I wouldn't live there, but i buy there.
- Investor · Austin, TX · Member since 2021 · 9k+ posts · 5k+ votes3y
Quote from @V.G Jason:
Slumlord, you're taking dimes to get crushed by dollars later. Investing in sunnyside is just a disaster waiting to happen.Quote from @Eliott Elias:
Quote from @V.G Jason:
Quote from @Eliott Elias:
Not a myth, you have to buy right. Price/rent ratio has to be good. Look into Sunnyside and 3rd ward, renting by the room or airbnb.
People airbnb in Sunnyside or 3rd ward? You're better off at Palace Inn in the Heights.
Those two neighborhoods are neck and neck with Baytown in the grimiest areas of greater Houston, just FYI. As for cash flowing in Houston, yeah with interest rates high, taxes high, and population growth high, it's going to be really tough to cash flow. It hasn't really gotten cut off from a market demand standpoint. I don't think it really will. Texas is in such great demand, it'd be a hard route to deter from for the average US homeowner due to politics, and hard to deter from cash buying investors due to appreciation and market demand. It's not friendly to leveraged players unless you go into really crap areas. But then you're not getting the upside of what you're really wanting. Making $200/mo to get your "investment" property in Sunnyside part of Houston is nowhere near worth the stress of it. Get me $200-$400 in solid, appropriate areas of town. Only way to do that is put a higher downpayment. I don't recommend "waiting" if you're able to invest right now, timing is never predictable. Infact, the process of this difficult search may take you few weeks, if not months.
Rookie, if you're putting more down to cash flow you're not buying the right deal. Sunnyside and 3rd ward are areas you can cash flow $500 a month plus with 15% down. I wouldn't live there, but i buy there.
I'm glad you see it that way. I wish more people did, would give me less competition. Your risk tolerance opinion is not what people are looking for here. They need places to put their money where they can actually cash flow, if you need help finding better deals call me.
- I don't think I'd be calling you given my business experience.
Quote from @Eliott Elias:
Quote from @V.G Jason:
Slumlord, you're taking dimes to get crushed by dollars later. Investing in sunnyside is just a disaster waiting to happen.Quote from @Eliott Elias:
Quote from @V.G Jason:
Quote from @Eliott Elias:
Not a myth, you have to buy right. Price/rent ratio has to be good. Look into Sunnyside and 3rd ward, renting by the room or airbnb.
People airbnb in Sunnyside or 3rd ward? You're better off at Palace Inn in the Heights.
Those two neighborhoods are neck and neck with Baytown in the grimiest areas of greater Houston, just FYI. As for cash flowing in Houston, yeah with interest rates high, taxes high, and population growth high, it's going to be really tough to cash flow. It hasn't really gotten cut off from a market demand standpoint. I don't think it really will. Texas is in such great demand, it'd be a hard route to deter from for the average US homeowner due to politics, and hard to deter from cash buying investors due to appreciation and market demand. It's not friendly to leveraged players unless you go into really crap areas. But then you're not getting the upside of what you're really wanting. Making $200/mo to get your "investment" property in Sunnyside part of Houston is nowhere near worth the stress of it. Get me $200-$400 in solid, appropriate areas of town. Only way to do that is put a higher downpayment. I don't recommend "waiting" if you're able to invest right now, timing is never predictable. Infact, the process of this difficult search may take you few weeks, if not months.
Rookie, if you're putting more down to cash flow you're not buying the right deal. Sunnyside and 3rd ward are areas you can cash flow $500 a month plus with 15% down. I wouldn't live there, but i buy there.
I'm glad you see it that way. I wish more people did, would give me less competition. Your risk tolerance opinion is not what people are looking for here. They need places to put their money where they can actually cash flow, if you need help finding better deals call me.
My risk tolerance is not one to have 40-50 properties at 75-85% leveraged, grab very solid cash flow, all in crap areas. And when the market comes calling I'll be long crap properties and short cash flow.
I'll grab 10-15 properties in good areas, that are 70-75% leveraged, grab solid cash flow and when the market comes calling I'll still be long cash and holding onto really good properties.I hope I am wrong, but take your dimes now. You sound like you've seen markets for just 7-10 years. Granted you have much more specific real estate experience than me, you have significantly less investment experience. And real estate is a totally different investment than anything else out there.
Quote from @Peter Brown:
I share the frustration..perhaps someone can explain what motivates "investors" to buy money losing properties but this is definitely what is happening. Are they waiting for another buyer to come along and pay an even crazier price? Are they waiting for rents to climb even further to get them into positive cash flow?
No one is motivated to buy losing properties. They structure more creatively, offer less, and/or put a bit more down if you're really bullish on the area. You can re-fi later, at any point to not necessarily "time" the market, and you'll then realize appreciation gains, get a lower rate, and have even higher cash flow.
edit: If none of those work or you're not a huge fan of the area. You just do not buy. Don't buy negatively flowing properties. You'll tie up future leverage and future resources.
- 3yManny VasquezBusiness MemberReal Estate Agent · Orange County · Member since 2022 · 320 posts · 293 votes
There are plenty of cash-flowing SFR everywhere....you just have to look a little harder, do a little more digging. For one, expand your search to include Houston and its greater area. Also, listen to the Bigger Pockets Podcasts where many invited guests have spoken about properties that at first didn't seem that they would cash-flow, however, they saw something, that with a little elbow-grease, would convert them to cash flow. For example, if the square footage was big enough, they would add another room or another bathroom that would command a higher rental price and thus cash flow. Maybe you can add an ADU or a Jr. ADU that would make the property cash flow. The point is, look at how you can "make a property cash flow". Some properties will not make sense (i.e. it would require too much money, etc). but some will.
@Matthew Harding it is definitely not "silly" to be looking for cashflow--cashflow should be one of the central considerations.
As for the question of whether cashflow is a "myth", you may have answered part of your own question when you said you're looking at a "relatively turn key" property.
In my experience, cashflow is rarely "found". Instead, cashflow is created.
This is similar to the RE saying "deals aren't found, they're made."
So, the obvious question is: "ok, how do I create cashflow?"
It often comes down to learning to see something in a property that other buyers don't see. For instance, being able to spot an easy opportunity to add a bedroom or a bathroom to a property...if it's an easy conversion, and it's on the right type of property in the right market, 10-20k spent to add a br and/or bathroom can pick you up an extra 500-1000 per month in rent...do the math, and you'll find that that is some incredible cash on cash return.
All sorts of rehabs/conversions can turn a total loser into a cashflowing property. ...another example: I've built ADUs in previously unfinished basements, which turned properties that were $500/mo negative into properties that now cashflow 1000/mo ...the power move was rolling the construction debt into refis on other properties at lower rates, which more than negated the construction debt...in other words, I got paid to build the ADUs (these days, this isn't usually possible--or at least, it's a lot less likely--now that rates are rising...but who knows, rates might decrease again at some point...).
...Although certain rehabs/conversions can force cashflow, there is real skill and art to spotting properties that are good candidates for these types of rehabs/conversions. ...an effective rehab/conversion is often a lot trickier than HGTV would have you believe, and choosing the wrong property to do this can completely blow up the financial model.
Another approach is to learn to find properties that have something that turns off other buyers, but which is irrelevant to cashflow, and irrelevant to your business model. For instance, I've bought properties in A class neighborhoods where EVERYONE wanted to live, but they were on relatively busy streets, which turned off retail buyers. However, I knew the streets weren't so busy that they would impact the rentability of the properties... I picked up the properties for a heavily discounted price (because they had sat on the market), and had no problems finding highly qualified (and high-earning) tenants that made the place cashflow right out of the gate.
Another example: I once bought a property in an A class neighborhood that had an awkwardly-placed stairwell inside the front entrance, which turned off other buyers. However, I knew that the stairwell had zero impact on the actual functionality of the property, and that it would have zero impact on its desirability as a rental. Once again, the property sat on the market for a long time, I bought it at a heavy discount, and it's been cash flowing ever since.
Cashflow can also be created by changing how you use the property—for instance, renting a house by the room or as MTR or STR sometimes creates cashflow.
By the way: every property I own cashflows well, and every property I own was bought on the MLS between 2016 and now--during what was probably the toughest buyer's market in American history! (I didn't have to look for off market deals, do weird business arrangements, or do anything unusual at all to get these properties, even in a tough buyer's market...shocker, I know!).
So, in summary: it is possible to get cashflow, but it's just not something that can be had without some effort and sacrifices...you have to go where others aren't going, and do what others aren't doing.
If it were possible to succeed at RE investing by buying turnkey, A class, perfect properties with no flaws, then everyone would be doing it! ...but, the reality is: RE investing takes creativity and flexible thinking, the ability to see opportunities others miss, the willingness to acquire properties others don't want, and the willingness to do what it takes to force cashflow.
Good luck out there!
@Matthew Harding There is a high probability that the U. S. will go into recession in 2023. If its a bad recession, then there will be lots of distressed homeowners and foreclosures. You may wish to postpone the purchase of your first rental home until we get to the bottom of the recession. You will need to develop a strategy to contact distressed homeowners. I'm sure that there are a few Houstonians, who could help you with this strategy.
- 3yJordan MoorheadBusiness MemberReal Estate Agent · Austin, TX · Member since 2015 · 5k+ posts · 3k+ votes
@Matthew Harding nice single family homes that are turn key in nice areas have never cashflowed except for a few years after the housing crash. I recommend going to local meetups, figuring out what people are doing to get cashflow and do that.
The Moorhead Team5140 Reviews - 3yPatrick DruryBusiness MemberReal Estate Agent · Columbus, OH & Cleveland OH · Member since 2021 · 1k+ posts · 2k+ votes
@Matthew Harding
It's definitely still possible to cashflow in today's market. You might need to put more down, find better deals or look in another market. Quote from @V.G Jason:
Slumlord, you're taking dimes to get crushed by dollars later. Investing in sunnyside is just a disaster waiting to happen.Quote from @Eliott Elias:
Quote from @V.G Jason:
Quote from @Eliott Elias:
Not a myth, you have to buy right. Price/rent ratio has to be good. Look into Sunnyside and 3rd ward, renting by the room or airbnb.
People airbnb in Sunnyside or 3rd ward? You're better off at Palace Inn in the Heights.
Those two neighborhoods are neck and neck with Baytown in the grimiest areas of greater Houston, just FYI. As for cash flowing in Houston, yeah with interest rates high, taxes high, and population growth high, it's going to be really tough to cash flow. It hasn't really gotten cut off from a market demand standpoint. I don't think it really will. Texas is in such great demand, it'd be a hard route to deter from for the average US homeowner due to politics, and hard to deter from cash buying investors due to appreciation and market demand. It's not friendly to leveraged players unless you go into really crap areas. But then you're not getting the upside of what you're really wanting. Making $200/mo to get your "investment" property in Sunnyside part of Houston is nowhere near worth the stress of it. Get me $200-$400 in solid, appropriate areas of town. Only way to do that is put a higher downpayment. I don't recommend "waiting" if you're able to invest right now, timing is never predictable. Infact, the process of this difficult search may take you few weeks, if not months.
Rookie, if you're putting more down to cash flow you're not buying the right deal. Sunnyside and 3rd ward are areas you can cash flow $500 a month plus with 15% down. I wouldn't live there, but i buy there.
Oh come on, I just saw your nice post on my Brompton property :-) My highest cash flow deal is in Sunnyside. With almost 2000 units total, this small 200 unit deal made up like 25% of my company profits in 2020. We don't run it like a slum, but it's by no means a pretty property. Has a lot of demand as we keep them clean and comfortable, yet basic and affordable.
I want to say I paid ~$40k/door? And we get like $900/month rents.Quote from @V.G Jason:
Quote from @Peter Brown:
I share the frustration..perhaps someone can explain what motivates "investors" to buy money losing properties but this is definitely what is happening. Are they waiting for another buyer to come along and pay an even crazier price? Are they waiting for rents to climb even further to get them into positive cash flow?
No one is motivated to buy losing properties. They structure more creatively, offer less, and/or put a bit more down if you're really bullish on the area. You can re-fi later, at any point to not necessarily "time" the market, and you'll then realize appreciation gains, get a lower rate, and have even higher cash flow.
edit: If none of those work or you're not a huge fan of the area. You just do not buy. Don't buy negatively flowing properties. You'll tie up future leverage and future resources.
Where I agree with you, V.G., is that you shouldn't be investing in areas like Sunnyside unless you have a lot of experience and have a strong team in place (i.e., don't expect to toss the keys to a 3rd party management company). Also buying 1 or 2 SFH in those areas is just asking to be kicked in the mouth. To make in in those areas you need scale. I still have a few SFH out there from when I started. They do okay but I wouldn't buy them today. however, when a large multi comes up, I'm out there bidding on it.
Quote from @Cody L.:
Quote from @V.G Jason:
Slumlord, you're taking dimes to get crushed by dollars later. Investing in sunnyside is just a disaster waiting to happen.Quote from @Eliott Elias:
Quote from @V.G Jason:
Quote from @Eliott Elias:
Not a myth, you have to buy right. Price/rent ratio has to be good. Look into Sunnyside and 3rd ward, renting by the room or airbnb.
People airbnb in Sunnyside or 3rd ward? You're better off at Palace Inn in the Heights.
Those two neighborhoods are neck and neck with Baytown in the grimiest areas of greater Houston, just FYI. As for cash flowing in Houston, yeah with interest rates high, taxes high, and population growth high, it's going to be really tough to cash flow. It hasn't really gotten cut off from a market demand standpoint. I don't think it really will. Texas is in such great demand, it'd be a hard route to deter from for the average US homeowner due to politics, and hard to deter from cash buying investors due to appreciation and market demand. It's not friendly to leveraged players unless you go into really crap areas. But then you're not getting the upside of what you're really wanting. Making $200/mo to get your "investment" property in Sunnyside part of Houston is nowhere near worth the stress of it. Get me $200-$400 in solid, appropriate areas of town. Only way to do that is put a higher downpayment. I don't recommend "waiting" if you're able to invest right now, timing is never predictable. Infact, the process of this difficult search may take you few weeks, if not months.
Rookie, if you're putting more down to cash flow you're not buying the right deal. Sunnyside and 3rd ward are areas you can cash flow $500 a month plus with 15% down. I wouldn't live there, but i buy there.
Oh come on, I just saw your nice post on my Brompton property :-) My highest cash flow deal is in Sunnyside. With almost 2000 units total, this small 200 unit deal made up like 25% of my company profits in 2020. We don't run it like a slum, but it's by no means a pretty property. Has a lot of demand as we keep them clean and comfortable, yet basic and affordable.
I want to say I paid ~$40k/door? And we get like $900/month rents.Your area is not Sunnyside. You are 77025, north of NRG, just south of W Holcombe. Your in the "worst" area of the best area of Houston. And you are in multifamily, your investment will be excellent as that area will get people pushing the bad out of it.
Sunnyside is more east of 288 and south of 610. So SE of where you are, the 77051 zip code mainly. Unless you are talking about another multi you have in the actual Sunnyside area.
But my point kind of stands, it's not the ideal place to invest. It's actually the last place I'd allocate capital, if I had a gun pointed to my head. I'd rather eat dirt for dinner everynight than invest there. Actual sunnyside will remain the slums of Houston, especially as the city gets wealthier and attracts more talent. Other pockets of Houston that are slummy are transitioning, once you go EaDo and start moving south it's going to be the very last places for Houston to resurrect. There's just a stigma there and not much traction on improving it.Quote from @V.G Jason:
Quote from @Cody L.:
Quote from @V.G Jason:
Slumlord, you're taking dimes to get crushed by dollars later. Investing in sunnyside is just a disaster waiting to happen.Quote from @Eliott Elias:
Quote from @V.G Jason:
Quote from @Eliott Elias:
Not a myth, you have to buy right. Price/rent ratio has to be good. Look into Sunnyside and 3rd ward, renting by the room or airbnb.
People airbnb in Sunnyside or 3rd ward? You're better off at Palace Inn in the Heights.
Those two neighborhoods are neck and neck with Baytown in the grimiest areas of greater Houston, just FYI. As for cash flowing in Houston, yeah with interest rates high, taxes high, and population growth high, it's going to be really tough to cash flow. It hasn't really gotten cut off from a market demand standpoint. I don't think it really will. Texas is in such great demand, it'd be a hard route to deter from for the average US homeowner due to politics, and hard to deter from cash buying investors due to appreciation and market demand. It's not friendly to leveraged players unless you go into really crap areas. But then you're not getting the upside of what you're really wanting. Making $200/mo to get your "investment" property in Sunnyside part of Houston is nowhere near worth the stress of it. Get me $200-$400 in solid, appropriate areas of town. Only way to do that is put a higher downpayment. I don't recommend "waiting" if you're able to invest right now, timing is never predictable. Infact, the process of this difficult search may take you few weeks, if not months.
Rookie, if you're putting more down to cash flow you're not buying the right deal. Sunnyside and 3rd ward are areas you can cash flow $500 a month plus with 15% down. I wouldn't live there, but i buy there.
Oh come on, I just saw your nice post on my Brompton property :-) My highest cash flow deal is in Sunnyside. With almost 2000 units total, this small 200 unit deal made up like 25% of my company profits in 2020. We don't run it like a slum, but it's by no means a pretty property. Has a lot of demand as we keep them clean and comfortable, yet basic and affordable.
I want to say I paid ~$40k/door? And we get like $900/month rents.Your area is not Sunnyside. You are 77025, north of NRG, just south of W Holcombe. Your in the "worst" area of the best area of Houston. And you are in multifamily, your investment will be excellent as that area will get people pushing the bad out of it.
Sunnyside is more east of 288 and south of 610. So SE of where you are, the 77051 zip code mainly. Unless you are talking about another multi you have in the actual Sunnyside area.
But my point kind of stands, it's not the ideal place to invest. It's actually the last place I'd allocate capital, if I had a gun pointed to my head. I'd rather eat dirt for dinner everynight than invest there. Actual sunnyside will remain the slums of Houston, especially as the city gets wealthier and attracts more talent. Other pockets of Houston that are slummy are transitioning, once you go EaDo and start moving south it's going to be the very last places for Houston to resurrect. There's just a stigma there and not much traction on improving it.I'm not talking about Brompton. I have properties all over -- including many in Sunnyside. I have about 2000 units. Almost all of them are inside the 610 loop or just outside. Brompton is just one property. Though it does make up a large % (Brompton is about 360 units -- so over 15% of my total portfolio)
Here is a map of where they are (I need to update the live google map as some have been sold since I last did it and others have been bought). Most are clustered in/around montrose as that's where I started and where my HQ is.
- Rental Property Investor · Houston, TX · Member since 2022 · 17 posts · 16 votes3y
Its definitely possible just have to continuously look for the right property/area and be patient. I recently purchased a single family home in the Jersey Village area that I found on the MLS that was pretty much turnkey - it only needed cosmetic repairs. It took about 4 months to find it as my search criteria was pretty strict, but it needed to be since it was my first property and I wanted make sure I eliminate as many potential issues before purchasing as possible. I only cashflow about $150 but that will increase when/if interest rates improve. Continue to be patient, network, use an realtor if you can (mine is amazing), and learn as much as you can. You'll find something!
Quote from @Cody L.:
Quote from @V.G Jason:
Quote from @Cody L.:
Quote from @V.G Jason:
Slumlord, you're taking dimes to get crushed by dollars later. Investing in sunnyside is just a disaster waiting to happen.Quote from @Eliott Elias:
Quote from @V.G Jason:
Quote from @Eliott Elias:
Not a myth, you have to buy right. Price/rent ratio has to be good. Look into Sunnyside and 3rd ward, renting by the room or airbnb.
People airbnb in Sunnyside or 3rd ward? You're better off at Palace Inn in the Heights.
Those two neighborhoods are neck and neck with Baytown in the grimiest areas of greater Houston, just FYI. As for cash flowing in Houston, yeah with interest rates high, taxes high, and population growth high, it's going to be really tough to cash flow. It hasn't really gotten cut off from a market demand standpoint. I don't think it really will. Texas is in such great demand, it'd be a hard route to deter from for the average US homeowner due to politics, and hard to deter from cash buying investors due to appreciation and market demand. It's not friendly to leveraged players unless you go into really crap areas. But then you're not getting the upside of what you're really wanting. Making $200/mo to get your "investment" property in Sunnyside part of Houston is nowhere near worth the stress of it. Get me $200-$400 in solid, appropriate areas of town. Only way to do that is put a higher downpayment. I don't recommend "waiting" if you're able to invest right now, timing is never predictable. Infact, the process of this difficult search may take you few weeks, if not months.
Rookie, if you're putting more down to cash flow you're not buying the right deal. Sunnyside and 3rd ward are areas you can cash flow $500 a month plus with 15% down. I wouldn't live there, but i buy there.
Oh come on, I just saw your nice post on my Brompton property :-) My highest cash flow deal is in Sunnyside. With almost 2000 units total, this small 200 unit deal made up like 25% of my company profits in 2020. We don't run it like a slum, but it's by no means a pretty property. Has a lot of demand as we keep them clean and comfortable, yet basic and affordable.
I want to say I paid ~$40k/door? And we get like $900/month rents.Your area is not Sunnyside. You are 77025, north of NRG, just south of W Holcombe. Your in the "worst" area of the best area of Houston. And you are in multifamily, your investment will be excellent as that area will get people pushing the bad out of it.
Sunnyside is more east of 288 and south of 610. So SE of where you are, the 77051 zip code mainly. Unless you are talking about another multi you have in the actual Sunnyside area.
But my point kind of stands, it's not the ideal place to invest. It's actually the last place I'd allocate capital, if I had a gun pointed to my head. I'd rather eat dirt for dinner everynight than invest there. Actual sunnyside will remain the slums of Houston, especially as the city gets wealthier and attracts more talent. Other pockets of Houston that are slummy are transitioning, once you go EaDo and start moving south it's going to be the very last places for Houston to resurrect. There's just a stigma there and not much traction on improving it.I'm not talking about Brompton. I have properties all over -- including many in Sunnyside. I have about 2000 units. Almost all of them are inside the 610 loop or just outside. Brompton is just one property. Though it does make up a large % (Brompton is about 360 units -- so over 15% of my total portfolio)
Here is a map of where they are (I need to update the live google map as some have been sold since I last did it and others have been bought). Most are clustered in/around montrose as that's where I started and where my HQ is.Those green houses are your properties? If so, you have pretty small exposure to sunnyside. You clearly are way more advanced than probably 99% of the folks here. Most of your properties are probably significantly better than 99% of the people here. My advice would be the normal person.
- The green ones are homes, but the blue icon next to the bottom/center green home is my large (~200 unit) Sunnside property. The homes I don't even care about as they're just leftovers from when I started. I've been slowly selling them off as tenants leave. But still have ~10 or so left.
Quote from @V.G Jason:
Quote from @Cody L.:
Quote from @V.G Jason:
Quote from @Cody L.:
Quote from @V.G Jason:
Slumlord, you're taking dimes to get crushed by dollars later. Investing in sunnyside is just a disaster waiting to happen.Quote from @Eliott Elias:
Quote from @V.G Jason:
Quote from @Eliott Elias:
Not a myth, you have to buy right. Price/rent ratio has to be good. Look into Sunnyside and 3rd ward, renting by the room or airbnb.
People airbnb in Sunnyside or 3rd ward? You're better off at Palace Inn in the Heights.
Those two neighborhoods are neck and neck with Baytown in the grimiest areas of greater Houston, just FYI. As for cash flowing in Houston, yeah with interest rates high, taxes high, and population growth high, it's going to be really tough to cash flow. It hasn't really gotten cut off from a market demand standpoint. I don't think it really will. Texas is in such great demand, it'd be a hard route to deter from for the average US homeowner due to politics, and hard to deter from cash buying investors due to appreciation and market demand. It's not friendly to leveraged players unless you go into really crap areas. But then you're not getting the upside of what you're really wanting. Making $200/mo to get your "investment" property in Sunnyside part of Houston is nowhere near worth the stress of it. Get me $200-$400 in solid, appropriate areas of town. Only way to do that is put a higher downpayment. I don't recommend "waiting" if you're able to invest right now, timing is never predictable. Infact, the process of this difficult search may take you few weeks, if not months.
Rookie, if you're putting more down to cash flow you're not buying the right deal. Sunnyside and 3rd ward are areas you can cash flow $500 a month plus with 15% down. I wouldn't live there, but i buy there.
Oh come on, I just saw your nice post on my Brompton property :-) My highest cash flow deal is in Sunnyside. With almost 2000 units total, this small 200 unit deal made up like 25% of my company profits in 2020. We don't run it like a slum, but it's by no means a pretty property. Has a lot of demand as we keep them clean and comfortable, yet basic and affordable.
I want to say I paid ~$40k/door? And we get like $900/month rents.Your area is not Sunnyside. You are 77025, north of NRG, just south of W Holcombe. Your in the "worst" area of the best area of Houston. And you are in multifamily, your investment will be excellent as that area will get people pushing the bad out of it.
Sunnyside is more east of 288 and south of 610. So SE of where you are, the 77051 zip code mainly. Unless you are talking about another multi you have in the actual Sunnyside area.
But my point kind of stands, it's not the ideal place to invest. It's actually the last place I'd allocate capital, if I had a gun pointed to my head. I'd rather eat dirt for dinner everynight than invest there. Actual sunnyside will remain the slums of Houston, especially as the city gets wealthier and attracts more talent. Other pockets of Houston that are slummy are transitioning, once you go EaDo and start moving south it's going to be the very last places for Houston to resurrect. There's just a stigma there and not much traction on improving it.I'm not talking about Brompton. I have properties all over -- including many in Sunnyside. I have about 2000 units. Almost all of them are inside the 610 loop or just outside. Brompton is just one property. Though it does make up a large % (Brompton is about 360 units -- so over 15% of my total portfolio)
Here is a map of where they are (I need to update the live google map as some have been sold since I last did it and others have been bought). Most are clustered in/around montrose as that's where I started and where my HQ is.Those green houses are your properties? If so, you have pretty small exposure to sunnyside. You clearly are way more advanced than probably 99% of the folks here. Most of your properties are probably significantly better than 99% of the people here. My advice would be the normal person.
- What was your purchase price, and what is it now rented for (or projected rent)?
Quote from @Stephen Daniel Pace:
Its definitely possible just have to continuously look for the right property/area and be patient. I recently purchased a single family home in the Jersey Village area that I found on the MLS that was pretty much turnkey - it only needed cosmetic repairs. It took about 4 months to find it as my search criteria was pretty strict, but it needed to be since it was my first property and I wanted make sure I eliminate as many potential issues before purchasing as possible. I only cashflow about $150 but that will increase when/if interest rates improve. Continue to be patient, network, use a realtor if you can (mine is amazing), and learn as much as you can. You'll find something!
I’m curious because it is nearly impossible to find cash flowing single families in my city as well. - Member since 2019 · 2 posts · 1 vote3y
The important thing to remember is cash flow. Don't be in a rush to purchase for the sake of purchasing or owning a piece of real estate. Be patient and you will find what you are looking for. You may need to add an additional realtor to your team, look in other neighborhoods with similar characteristics and always be ready to make an offer with your contingencies. Good luck! They are out there. I know because we have two that cash flow.
(found on MLS)
- 3yJoe VilleneuvePro MemberPlymouth, MI · Member since 2013 · 13k+ posts · 19k+ votesLet's say you separated your shoulder, and when you went into the Dr office the DR asked you what was wrong. Your answer was, "it hurts when I try to raise my arm". What's the first thing the DR tells you?
Quote from @Keith N.:
What was your purchase price, and what is it now rented for (or projected rent)?Quote from @Stephen Daniel Pace:
Its definitely possible just have to continuously look for the right property/area and be patient. I recently purchased a single family home in the Jersey Village area that I found on the MLS that was pretty much turnkey - it only needed cosmetic repairs. It took about 4 months to find it as my search criteria was pretty strict, but it needed to be since it was my first property and I wanted make sure I eliminate as many potential issues before purchasing as possible. I only cashflow about $150 but that will increase when/if interest rates improve. Continue to be patient, network, use a realtor if you can (mine is amazing), and learn as much as you can. You'll find something!
I’m curious because it is nearly impossible to find cash flowing single families in my city as well.
The answer the DR gives you is the same answer to the problem of "...it's nearly impossible to find single families in my city as well". - Member since 2019 · 7k+ posts · 4k+ votes3y
Quote from @Leo R.:
@Matthew Harding it is definitely not "silly" to be looking for cashflow--cashflow should be one of the central considerations.
As for the question of whether cashflow is a "myth", you ma
If it were possible to succeed at RE investing by buying turnkey, A class, perfect properties with no flaws, then everyone would be doing it! ...but, the reality is: RE investing takes creativity and flexible thinking, the ability to see opportunities others miss, the willingness to acquire properties others don't want, and the willingness to do what it takes to force cashflow.
^^^^^this
usually the folks that are able to spot opportunity is those who are good in other investment as well. It's not really hard to find niche and deals in real estate
- Rental Property Investor · Member since 2021 · 13 posts · 5 votes3y
@Matthew Harding todays high interest rates + high Texas property taxes makes finding a cash flowing deal even harder in that state. I’ve been analyzing properties in Houston for the past few weeks and haven’t found many that made sense for a LTR. There is a big cluster of hospitals in south Houston - this area might be good for a mid term rental to traveling nurses. But I’d want to make sure it’s solid as a long term rental as a backup plan.
A $500k property = $1k a month property taxes- this is a big hurdle in my opinion.
Good luck sir!
Join the conversationCreate a free account to reply, vote on answers and follow this thread.