Entry points at different phases of market.

2 Replies

With cyclical nature of market, should focus of investor be on different kind of property at different phases?

With current market conditions (upswing of prices) its very difficult to find value properties, so is it okay  to buy something as long as it meets 50% rule?   

It depends on the individual micro-market and how much exactly you can get the property for. You're going to have a hard time if all you offer is 50% of ARV. But if you know that there are active buyers for the property when flipped, 70 to 75% of ARV can still net you thousands and get you more projects.

Trying to analyze the phases will only discourage you in the long run.  Take it home by home, opportunity by opportunity and scrutinize each one objectively.  If the numbers match, then they match, if they don't, they don't.   

Originally posted by @Account Closed :

It depends on the individual micro-market and how much exactly you can get the property for. You're going to have a hard time if all you offer is 50% of ARV.

I don't believe the OP was referring to buying the property at half of ARV. 50% Rule typically refers to a ballpark estimate of the expense ratio (including capex and rent loss) for a rental property.

So, the question is, are these rental properties that the OP is talking about purchasing?

If so, the fundamentals of return metrics will apply to any real estate market. If the ROI (whatever specific metrics you want to use) are within your desired range, go for it!

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