REI Strategies??

Question

Here in Anchorage, rents run ~1% of purchase price, and prices are fairly steep.  3/2 (each side) duplexes easily run $450K and older 8/4 (total) 4-plexes are about the same.  Occasionally one can find a SFR in the $100K range for rehab, but most are priced closer to $200K (with $250k-$300K ARV).  Given this market and access to $250K via line of credit, I'd like to hear from the crowd what strategy they would pursue.  Thanks!

Jamie Rose · Answer

@Kerry Drake - old thread - how did I find this! But - you're basic outline is correct and hasn't changed much here lately. Only difference I'm seeing is that small commercial multi-family has some good buying opportunities - (6-15 units) if you can get the financing in the range of 4.5-5% APR.

Steve Endress · Answer

If you have any fannie loans left (and good credit) I would definitely take that 250k and diversify in three markets with eight-ten properties.  I did so with my own ten fannies and now am doing with my wife's.  Would be glad to chat further if you are interested.  PM me.

Mark Ferguson · Answer

many I my long term rentals are just over the 1% rule. I have very low taxes and low maintenance with my SFRs.

Dave Savage · Answer

What is the historical appreciation rate in the market?  What happened in 08/09 with property values?  Any feel for how rents have moved over the last 5-10years?

If you have a strong historical capital and rent appreciation rate it might make sense to get into this market and wait for natural rent increases and appreciation to take hold and make for better investments if you wanted to stay local.

You could also consider looking for turn-key investments in another city (Indy, Memphis, etc) where the returns could be much better - but the risk without having the ability to drive by the properties could be greater.  Alternatively you could write private notes for rehabbers, or buy and hold investors to use these funds for greater returns than you could get in the market.