How to find Cash flowing properties - What am I missing?

St. Petersburg, Florida
Starting Out
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How to find Cash flowing properties - What am I missing?

Damian Callaghan
Member since 2022 · 11 posts · 7 votes

I'm new to investment but spending a lot of time on market and deal analysis. I am ready to buy but so far - even in markets where you can still pick a home up in an appreciating market for $250K - I am struggling to see how they cashflow with 25% investor down payment and interest rates up there near 7%. It frustrating - Im ready to go but certain I am missing something. I use a 0.86% (rather than 1) for quick deal analysis but do detailed analysis as well. On a $250k house you are looking at $62,500K down (which isn't cheap) - then somewhere around $1500 a month for repayment and taxes (doesn't take in to account mgmt, vacancy, capital) - and these markets I am looking at only getting $14-1600 a month in rent..

What am I missing? Help from this network welcomed!!

Note - I wanted to invest locally but even worse on Gulf Coast so been looking at NC, Jacksonville amongst other places 

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Andres Murillo
Real Estate Agent · Los Angeles, CA · Member since 2022 · 137 posts · 106 votes
3y

Hey Damian! I have a couple suggestions here  

1. “Marry the property, date the interest rate.” Rates will drop eventually but the house you’re analyzing may not. If a property is in the red a few hundred bucks, analyze it with a 5% internet and see where you might be in the future. You can refi and pull cash out in the future to invest in your next deal. 

2. Diversify your strategy or your market. I’ve built a career helping people buy Traditional Rentals in growing markets, but in todays world I’m focusing on Short Term Rentals for clients hyper focused on cash flow. The higher average monthly incomes help properties cash flow much more regularly. You might also consider other markets. Between advisors like myself and local managers it’s easy to invest further than arms distance away now. 

Happy to chat more about any of these ideas. 

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  • Bob S.
    Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes
    3y

    HOW simple, just connect with those that provide rentals . I can get as many as I want in my market. All with not less than 10 -15% net caps based on cash purchase, , All in 100k rents 20k gross net about 13k, 

    Good luck 

    0Reply
  • Joe HammelBusiness Member
    Real Estate Agent · Metro Detroit, MI · Member since 2018 · 614 posts · 666 votes
    3y

    @Damian Callaghan

    Metro Detroit

    (my rental portfolio is here)

    Purchase: $80k-$130k

    Rent: $1100-$1500

    ROI: 10-14%

    Cash flow: $250-$350/door

    Appreciation: Double digit (for the past 10 years, can send data)

    Location: C+, B- (suburbs and certain markets)

    We have over a dozen Fortune 500 companies just in Metro Detroit with huge Healthcare, Auto, and mortgage industry National footprints. Ford, Rocket mortgage, Beaumont hospitals and more. All complimented with Amazon fulfillment centers, google, and more tech manufacturing jobs.

    The bad reputation of “Detroit” comes from OOS investors wanting $20k D class properties. We don’t buy those lol.

    [email protected]248-422-1685
    FIRE Realty Team - Keller Williams5380 Reviews
    WebsiteView Page
    1Reply
  • Gian Miccio
    Member since 2023 · 1 post · 0 votes
    3y

    If you need help finding property, send me a message and we can see if i can help you.

    0Reply
  • Bob S.
    Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes
    3y
    Quote from @Damian Callaghan:

    I'm new to investment but spending a lot of time on market and deal analysis. I am ready to buy but so far - even in markets where you can still pick a home up in an appreciating market for $250K - I am struggling to see how they cashflow with 25% investor down payment and interest rates up there near 7%. It frustrating - Im ready to go but certain I am missing something. I use a 0.86% (rather than 1) for quick deal analysis but do detailed analysis as well. On a $250k house you are looking at $62,500K down (which isn't cheap) - then somewhere around $1500 a month for repayment and taxes (doesn't take in to account mgmt, vacancy, capital) - and these markets I am looking at only getting $14-1600 a month in rent..

    What am I missing? Help from this network welcomed!!

    Note - I wanted to invest locally but even worse on Gulf Coast so been looking at NC, Jacksonville amongst other places 


     You need to look outside your market. I get 20 a week, all will have not less than 15- 25% NET caps based on cash purchases,,,, Its all about your Newtwork and your team

    Agood luck 

    1Reply
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