400k cash, no loan, VA, need cash flow

Fairfax, Virginia
Buying & Selling Real Estate
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400k cash, no loan, VA, need cash flow

Thu Minh Dam
Member since 2023 · 23 posts · 4 votes

Hi everyone!

I will move from FL to McLean, VA in next several months. With 300k - 400k cash (no loan), which area / city in VA should I buy a rental property (SFH) while I need cash flow (more than appreciation) ?

I really need your help and highly appreciate your all comments. Many thanks from a newbie 🥰

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John Norman
Realtor · Richmond, VA · Member since 2020 · 30 posts · 16 votes
2y
Quote from @Thu Minh Dam:

Hi everyone!

I will move from FL to McLean, VA in next several months. With 300k - 400k cash (no loan), which area / city in VA should I buy a rental property (SFH) while I need cash flow (more than appreciation) ?

I really need your help and highly appreciate your all comments. Many thanks from a newbie 🥰

questions: 
1) What monthly/yearly cash flow are you wanting on your $400k? $2,500 a month gets you a 7.5% CAC
2) Are you wanting to keep it longterm or looking more for cash flow for lower amount of time?
3) Avoid HOA homes. HOA eats into your cash flow and can be a nightmare with rentals
4) The closer you get to DC, the higher your rents will be. But $400k doesn't go far.

Do you have to buy real estate with the $400k? Is it a 1031 exchange? 

You'd get much higher returns as a Private Money Lender or as an equity partner in a renovation project to refi into a DSCR once rents are established
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  • Sean HudginsPro Member
    Real Estate Agent · Chesapeake Va · Member since 2019 · 150 posts · 100 votes
    2y

    Are you looking to house hack or just want a rental property? 

    McLean is pretty close to DC so I'm thinking you may need to venture away from that area to get a better cash flowing property.

    [email protected]757-844-8215
    0Reply
  • Martin Smith
    Realtor · Washington, DC · Member since 2020 · 29 posts · 27 votes
    2y

    Are you locked into only considering Virginia? There's a number of options in both Maryland and West Virginia that may actually be geographically closer to McLean than some of your Virginia options that may meet your needs for cash flow ahead of appreciation. 

    0Reply
  • Jack Seiden
    Real Estate Agent · Washington DC · Member since 2016 · 847 posts · 654 votes
    2y
    Quote from @Thu Minh Dam:

    Hi everyone!

    I will move from FL to McLean, VA in next several months. With 300k - 400k cash (no loan), which area / city in VA should I buy a rental property (SFH) while I need cash flow (more than appreciation) ?

    I really need your help and highly appreciate your all comments. Many thanks from a newbie 🥰


     The best yields minus appreciation are going to be found in cheaper area, front Royal area in Virginia, PG, Baltimore County and I suppose Baltimore city, eastern shore of Md etc. 

    2Reply
  • Thu Minh Dam
    OP
    Member since 2023 · 23 posts · 4 votes
    2y
    Quote from @Sean Hudgins:

    Are you looking to house hack or just want a rental property? 

    McLean is pretty close to DC so I'm thinking you may need to venture away from that area to get a better cash flowing property.

    I want a rental property because I have another house to live. 

    I also don't think that I can find a SFH within my budget near DC. That is the reason why I ask "which area in VA". Thank you for your advice 😊

    0Reply
  • John Norman
    Realtor · Richmond, VA · Member since 2020 · 30 posts · 16 votes
    2y
    Quote from @Thu Minh Dam:

    Hi everyone!

    I will move from FL to McLean, VA in next several months. With 300k - 400k cash (no loan), which area / city in VA should I buy a rental property (SFH) while I need cash flow (more than appreciation) ?

    I really need your help and highly appreciate your all comments. Many thanks from a newbie 🥰

    questions: 
    1) What monthly/yearly cash flow are you wanting on your $400k? $2,500 a month gets you a 7.5% CAC
    2) Are you wanting to keep it longterm or looking more for cash flow for lower amount of time?
    3) Avoid HOA homes. HOA eats into your cash flow and can be a nightmare with rentals
    4) The closer you get to DC, the higher your rents will be. But $400k doesn't go far.

    Do you have to buy real estate with the $400k? Is it a 1031 exchange? 

    You'd get much higher returns as a Private Money Lender or as an equity partner in a renovation project to refi into a DSCR once rents are established
    3Reply
  • Brandon Wagner
    Real Estate Agent · Northern Virginia · Member since 2021 · 106 posts · 50 votes
    2y

    My recommendations:  

    Good -  If you're certain you want a 400K or less property, I'd recommend Sterling, Manassas, or Woodbridge.  

    Great -  If you're willing to take a loan of 100-200K I'd shoot for Reston/Herndon/Centreville area.  (You'll still cashflow, and get more appreciation)

    Best - Find an assumable loan/seller financed deal in the NOVA area.  Expand your price range to about 600K-700K.  Take over a loan at ~3%.  It's like going back in time! You'll get your cash flowing property, it'll have better appreciation, you're further along the amortization schedule, and there is less competition, because most people don't have enough cash to make up the difference between the house value and the loan amount.

    2Reply
  • Thu Minh Dam
    OP
    Member since 2023 · 23 posts · 4 votes
    2y
    Quote from @Martin Smith:

    Are you locked into only considering Virginia? There's a number of options in both Maryland and West Virginia that may actually be geographically closer to McLean than some of your Virginia options that may meet your needs for cash flow ahead of appreciation. 

    Dear Mr. Martin, 

    Thank you so much for your comments. I highly appreciate it. I choose north Virginia just because I think that this area has good appreciation. 
    If you don’t mind, can you help suggest ”options in both Maryland and West Virginia that may actually be geographically closer to McLean than some of your Virginia options that may meet your needs for cash flow ahead of appreciation”. Many thanks 😊 
    0Reply
  • Thu Minh Dam
    OP
    Member since 2023 · 23 posts · 4 votes
    2y
    Quote from @Jack Seiden:
    Quote from @Thu Minh Dam:

    Hi everyone!

    I will move from FL to McLean, VA in next several months. With 300k - 400k cash (no loan), which area / city in VA should I buy a rental property (SFH) while I need cash flow (more than appreciation) ?

    I really need your help and highly appreciate your all comments. Many thanks from a newbie 🥰


     The best yields minus appreciation are going to be found in cheaper area, front Royal area in Virginia, PG, Baltimore County and I suppose Baltimore city, eastern shore of Md etc. 

    Thank you so much, Jack. I note them down 😊 
    0Reply
  • Thu Minh Dam
    OP
    Member since 2023 · 23 posts · 4 votes
    2y
    Quote from @John Norman:
    Quote from @Thu Minh Dam:

    Hi everyone!

    I will move from FL to McLean, VA in next several months. With 300k - 400k cash (no loan), which area / city in VA should I buy a rental property (SFH) while I need cash flow (more than appreciation) ?

    I really need your help and highly appreciate your all comments. Many thanks from a newbie 🥰

    questions: 
    1) What monthly/yearly cash flow are you wanting on your $400k? $2,500 a month gets you a 7.5% CAC
    2) Are you wanting to keep it longterm or looking more for cash flow for lower amount of time?
    3) Avoid HOA homes. HOA eats into your cash flow and can be a nightmare with rentals
    4) The closer you get to DC, the higher your rents will be. But $400k doesn't go far.

    Do you have to buy real estate with the $400k? Is it a 1031 exchange? 

    You'd get much higher returns as a Private Money Lender or as an equity partner in a renovation project to refi into a DSCR once rents are established
    Thank you John for spending time on very detailed reply. I truly appreciate it.

    1. Yes, 7.5% COC ROI is good to me.

    2. Yes, I will keep it for long term.

    3. I note it down. Thank you for remind me.

    4. I think that with $400, I can only find a SFH in Woodbridge or Fredericksburg.

    5. No, it’s not 1031 Exchange 

    Once again, thank you so much for your sharing.
    0Reply
  • John Norman
    Realtor · Richmond, VA · Member since 2020 · 30 posts · 16 votes
    2y
    Quote from @Thu Minh Dam:
    Quote from @John Norman:
    Quote from @Thu Minh Dam:

    Hi everyone!

    I will move from FL to McLean, VA in next several months. With 300k - 400k cash (no loan), which area / city in VA should I buy a rental property (SFH) while I need cash flow (more than appreciation) ?

    I really need your help and highly appreciate your all comments. Many thanks from a newbie 🥰

    questions: 
    1) What monthly/yearly cash flow are you wanting on your $400k? $2,500 a month gets you a 7.5% CAC
    2) Are you wanting to keep it longterm or looking more for cash flow for lower amount of time?
    3) Avoid HOA homes. HOA eats into your cash flow and can be a nightmare with rentals
    4) The closer you get to DC, the higher your rents will be. But $400k doesn't go far.

    Do you have to buy real estate with the $400k? Is it a 1031 exchange? 

    You'd get much higher returns as a Private Money Lender or as an equity partner in a renovation project to refi into a DSCR once rents are established
    Thank you John for spending time on very detailed reply. I truly appreciate it.

    1. Yes, 7.5% COC ROI is good to me.

    2. Yes, I will keep it for long term.

    3. I note it down. Thank you for remind me.

    4. I think that with $400, I can only find a SFH in Woodbridge or Fredericksburg.

    5. No, it’s not 1031 Exchange 

    Once again, thank you so much for your sharing.

     You are on the right path and shifting your focus down further south towards Fredricksburg will open up your window. 

    I specialize in creative financing ideas as well, so with you having 300-400k, you have a great opportunity to even find some properties to create "value add" to really pump up your appreciation. 

    0Reply
  • Martin Smith
    Realtor · Washington, DC · Member since 2020 · 29 posts · 27 votes
    2y
    Quote from @Thu Minh Dam:
    Quote from @Martin Smith:

    Are you locked into only considering Virginia? There's a number of options in both Maryland and West Virginia that may actually be geographically closer to McLean than some of your Virginia options that may meet your needs for cash flow ahead of appreciation. 

    Dear Mr. Martin, 

    Thank you so much for your comments. I highly appreciate it. I choose north Virginia just because I think that this area has good appreciation. 
    If you don’t mind, can you help suggest ”options in both Maryland and West Virginia that may actually be geographically closer to McLean than some of your Virginia options that may meet your needs for cash flow ahead of appreciation”. Many thanks 😊 
    I would actually look at Frederick, MD for the best appreciation. It’s the fastest growing county in the state, and values are up SUBSTANTIALLY over the past five years, especially in the downtown core, but there’s still good opportunities in the right areas. Happy to chat more if you’d like - feel free to send me a DM!
    0Reply
  • Jawaid Kotwal
    Member since 2020 · 3 posts · 0 votes
    2y

    If you are still in the market, Manassas may be your best choice as the rental market is strong there and the prices are relatively low.

    0Reply
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