1 rental a year goal/cash flow (areas)

Member since 2018 · 1 post · 1 vote

A true newb here. My goal is to invest in one single home rental property a year for around $100,000 and rent it out for means of cash flow. I ultimately want more financial freedom down the road and have an array of unIts. I am currently out priced fo where I live (oc ca) so I was thinking investing in the Midwest or the south. I lived in DFW, Austin and Phoenix and would love a rental In these places but I’m hearing mixed reviews (also with my price point) Are there any places y’all can recommend me? Any advice for just starting out? Thanks!

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Stone Jin

Rental Property Investor · Chandler AZ and Sylvania, OH · Member since 2009 · 708 posts · 561 votes

100K may not be able to buy something in the markets you want, but 100K can buy something in a B+ neighborhood in a tier 2 tier 3 city. Sounds like you are looking to invest outside of the area you live in anyways. Also if you have 100K cash, then you can buy 3 130K houses, for 2 200K houses, if you only have 20-25k cash, I would try to figure out how to get more cash before plowing into a rental. You will need some reserves for when the AC goes out. Lastly when starting out set your expectation on cashflow, you will not get rich on your first property or second or third. However if you keep at it, one day you will be pleasantly surprised at the cashflow and debt pay down and appreciation and your net worth.

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Jordan MoorheadBusiness Member
Real Estate Agent · Austin, TX · Member since 2015 · 5k+ posts · 3k+ votes
8y
Welcome to BP!
I'd say you're correct in being priced out of those areas but worry about the numbers, not the price. Sometimes the low cost properties are low cost for a reason.
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Eddie Soto
Temecula, CA · Member since 2016 · 2 posts · 1 vote
8y
Hi Joshua and welcome to BP!
I like your thought process and strategy, especially just getting started. I think Brandon Turner coined "The Stack" of starting with a low number of rentals and slowly building them up over time. So you are on to something!
I invest out of State because CA where I live doesn't make sense for my buy and hold cash flow strategy. I've found that your team is your most important asset when investing out of state. This takes time, networking, diligence and a whole lot of trust but it can be done.
Then, as Jordan stated, get really intimate with the numbers to see if they realistically make sense. I've started to train myself recently to ask, "Why shouldn't I buy this deal?" (I heard this on a podcast somewhere). It helps put things into an investor perspective.
There are many ways to find and keep property......this is just where I start.
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Matt Shields
Broker · Phoenix, AZ · Member since 2015 · 351 posts · 273 votes
8y
There are very few SFR's at $100,000 in the Phoenix Metro area and the few available are disasters. There are condo/townhomes in this price range.
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Stone Jin
Rental Property Investor · Chandler AZ and Sylvania, OH · Member since 2009 · 708 posts · 561 votes
8y
100K may not be able to buy something in the markets you want, but 100K can buy something in a B+ neighborhood in a tier 2 tier 3 city. Sounds like you are looking to invest outside of the area you live in anyways. Also if you have 100K cash, then you can buy 3 130K houses, for 2 200K houses, if you only have 20-25k cash, I would try to figure out how to get more cash before plowing into a rental. You will need some reserves for when the AC goes out. Lastly when starting out set your expectation on cashflow, you will not get rich on your first property or second or third. However if you keep at it, one day you will be pleasantly surprised at the cashflow and debt pay down and appreciation and your net worth.
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