If you have the ability to target a specific purchase price, I suggest staying in the $250k-$1m range. From a lending standpoint, most loans <$150k loan amount has the highest risk and, therefore, higher rates. Typically, anything in the middle range has a reduced risk and more favorable terms.
Target a price based on where I am in my REI plan, which has a specific amount of cash available, and a specific return needed from that cash, at the specific timeline in my plan. Notice how often I used the word "specific".
Target a price based on where I am in my REI plan, which has a specific amount of cash available, and a specific return needed from that cash, at the specific timeline in my plan. Notice how often I used the word "specific".
@Joe Villeneuve Do you factor in property appreciation in your ROI calc?
Target a price based on where I am in my REI plan, which has a specific amount of cash available, and a specific return needed from that cash, at the specific timeline in my plan. Notice how often I used the word "specific".
@Joe Villeneuve Do you factor in property appreciation in your ROI calc?
Yes, but no necessarily the way you might think. Going into a potential deal, I look at the track record of appreciation (sales comps) in the immediate area, not the general area, and based solely on properties that are within 10% higher/lower in sq ftg than the property I'm looking at. I have a goal of a specific number ()in dollars, NOT percentages) that I need to achieve in appreciation. That number projected needs to happen within 3 to 5 years. Based on the property history, and the area, if that has a strong potential of happening, then I'm interested. The property must also CF high enough to recover my cost (DP) within that same time period. Then I sell, since that is when the property reaches its maximum return.