What criteria is in your buy box

[Bianca Rodrigues]

Hi all!

Just curious to see what criteria you have when analyzing a potential rental property.

Thank you,

Bianca 

[Wayne Kerr]

Buy box...First I narrow down the type of property, the size, the location etc. 

For me location comes first - I can change almost everything about a property other than the location (this will dictate the school, crime etc). After that I must have 2 bathrooms - one bathroom makes the property hard to rent and later sell. Type - I'm open to - 1-4 units, SFH - all ok

Now we've got the type narrowed down and need to make the numbers work. 

For me on a SFH, after all expenses are paid (PITI, PM fees, vacancy, repairs/maintenance/cap Ex) I want to make $150 per door. For MFH I want $100 per door. Now that the cashflow is settled I look at ROI - this depends based on the property and location. For an awesome SFH in a great area I'll do 7% CoC ROI, for a MFH I'm looking at a minimum of 15%. On top of that I need equity capture at the buy. I'll go up to 85% ARV (after all expenses are paid) on a great property in a great location. Mediocre location I'm looking at being all in for 75% ARV (this is again after all rehab expenses are paid).

So there's really three things I'm looking at to meet my criteria - cashflow, CoC ROI and equity capture at the buy

Here lately I've been hovering the 82-85% ARV mark on my SFHs after the rehab - we're still dealing with high prices and now high rates. Makes it a little more difficult that it has previously been.

I will likely be taking a year or so break after this next one just to let everything get settled. I've done 5 properties in the last year and a half and I'm just burnt out