What criteria is in your buy box
Rental Property Investor · Member since 2022 · 40 posts · 38 votes
What criteria is in your buy box
Most Popular Reply
Rental Property Investor · Somewhere over the Rainbow · Member since 2021 · 1k+ posts · 1k+ votes
3yBuy 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
14 Replies
- Investor · Charleston, SC · Member since 2011 · 606 posts · 413 votes3y
Must have a DSCR (debt coverage service ratio) of 1.2 or more. The more the better. Basically you want the property to cash flow after paying taxes, insurance, interest, vacancy, etc.
- 3yAlecia LovelessPro MemberMember since 2019 · 3k+ posts · 2k+ votes
@Bianca Rodrigues I use the BP rental calculator when analyzing properties. I'm a Pro Member so can use it as much as I want. After all expenses and rents are in it must cash flow at least $200/door. Have a decent ROI and look good for potential future growth.
Also I look at taxes as the can vary widely in my area and are difficult to get lowered so if it is a high property tax investment I may look for a better deal elsewhere as it can cut into my cash flow by as much as $2-300/month which can be a deal breaker.
For example in my town a $200K property can have $3500 property taxes or can have $7000 in property taxes which would be a deal breaker.
- Rental Property Investor · Somewhere over the Rainbow · Member since 2021 · 1k+ posts · 1k+ votes3y
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
- Rental Property Investor · Member since 2022 · 40 posts · 38 votes3yReally appreciate your response! How do you figure how much you’ll make per door? Silly question, but I’ve never accounted for a per unit return if that makes sense?
Quote from @Jeremy Horton:
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
I am currently in Massachusetts and the prices here are incredibly high. Do you do out of state investing? I’ve been more and more interested in the Columbus/ Cleveland OH markets. - Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes3y
Quote from @Bianca Rodrigues:
Hi all!
Just curious to see what criteria you have when analyzing a potential rental property.
Thank you,
Bianca
Nothing else matters as long as I get about 20% net caps, based on cash purchase,
- 3yRemington LymanBusiness MemberReal Estate Agent · Columbus, OH · Member since 2017 · 6k+ posts · 7k+ votes
Quote from @Bianca Rodrigues:
Really appreciate your response! How do you figure how much you’ll make per door? Silly question, but I’ve never accounted for a per unit return if that makes sense?Quote from @Jeremy Horton:
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
I am currently in Massachusetts and the prices here are incredibly high. Do you do out of state investing? I’ve been more and more interested in the Columbus/ Cleveland OH markets.I am from CT and have been buying in Columbus, Ohio. The cash flow and appreciation has been solid
- Rental Property Investor · Member since 2022 · 40 posts · 38 votes3yHow has your experience been investing out of state and building a team to help with property management or repairs?
Quote from @Remington Lyman:
Quote from @Bianca Rodrigues:
Really appreciate your response! How do you figure how much you’ll make per door? Silly question, but I’ve never accounted for a per unit return if that makes sense?Quote from @Jeremy Horton:
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
I am currently in Massachusetts and the prices here are incredibly high. Do you do out of state investing? I’ve been more and more interested in the Columbus/ Cleveland OH markets.I am from CT and have been buying in Columbus, Ohio. The cash flow and appreciation has been solid
Is there a specific neighborhood in Columbus that you feel has done better in terms of cash flow/appreciation? - 3yRemington LymanBusiness MemberReal Estate Agent · Columbus, OH · Member since 2017 · 6k+ posts · 7k+ votes
Quote from @Bianca Rodrigues:
How has your experience been investing out of state and building a team to help with property management or repairs?Quote from @Remington Lyman:
Quote from @Bianca Rodrigues:
Really appreciate your response! How do you figure how much you’ll make per door? Silly question, but I’ve never accounted for a per unit return if that makes sense?Quote from @Jeremy Horton:
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
I am currently in Massachusetts and the prices here are incredibly high. Do you do out of state investing? I’ve been more and more interested in the Columbus/ Cleveland OH markets.I am from CT and have been buying in Columbus, Ohio. The cash flow and appreciation has been solid
Is there a specific neighborhood in Columbus that you feel has done better in terms of cash flow/appreciation?It has gotten better over time. You will learn who you like and dislike working with. It will not be perfect in the beginning.
I buy wherever there is a deal tbh. I prefer A and B class areas but I care less positive cash flow than others
- 3yEvan HoppleBusiness MemberReal Estate Agent · Columbus Cleveland Dayton, OH · Member since 2023 · 284 posts · 420 votes
@Bianca Rodrigues Hilltop, Linden, Franklinton, Whitehall, Hungarian/Vassor Village, Reeb-Hosack, Lincoln Village are the best cash flowing neighborhoods in Columbus. We are seeing appreciation across the whole city
Reafco Real Estate - 3yRobert EllisBusiness MemberDeveloper · Miami, FL · Member since 2014 · 3k+ posts · 1k+ votes
Hey there, fellow real estate enthusiast!
When it comes to real estate investing in Columbus, Ohio, here's a quick tip from your friends at Pink Construction: Pay close attention to the purchase price per unit and per bedroom.
In the Columbus market, you can expect a 2-bedroom unit to rent for around $800, while a 3-bedroom might fetch about $1,200, and so on. To keep your investment safe, aim to keep your cost per unit under $150,000. This includes both the purchase price and any renovation expenses.
But here's the kicker: Consider multi-unit properties, like 4-unit buildings. They often offer cost advantages and can boost your rental income.
In a nutshell, when hunting for Columbus real estate deals, don't forget the "per unit" and "per bedroom" metrics. Keep it conservative, Rob, and you'll be on your way to a profitable investment. Happy investing!
Best regards, Rob Pink Construction
Section 8 Launch52 Reviews - 3yMichael SmytheBusiness MemberReal Estate Agent · Metro Detroit · Member since 2023 · 4k+ posts · 3k+ votes
SFR or MF?
Logical Property Management4.9454 Reviews - Investor · Greenville, SC · Member since 2016 · 5k+ posts · 13k+ votes3y
20-25+% IRR using a 5-year period for direct owned real estate. Otherwise, it's easier to invest passively to get IRRs in the teens.
- 3yAlfath AhmedBusiness MemberReal Estate Agent · Columbus, OH · Member since 2022 · 1k+ posts · 1k+ votes
Quote from @Bianca Rodrigues:
Hi all!
Just curious to see what criteria you have when analyzing a potential rental property.
Thank you,
Bianca
I look more into buying in areas where there is economic growth. I personally am buying in areas like Franklinton, North Linden, North Hilltop, Driving Park, King-Lincoln. If i can get the property under-valued then I will usually buy it. I can ride the appreciation wave. I use different strategies for different areas.
ReafCo | Ahmed Group 536 Reviews
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