Good Afternoon. Just doing some research/educating my self and I am on tho topic of analyzing potential markets. My question is, is there a specific criteria that is used for the area you are questioning in order to find out if this area has profitable real estate in this radius. Thanks for the help!
Great question, I focus on one thing and one thing only, I focus on cash flow. I can figure out market rents and my cost to own pretty easily. Then if the spread looks big enough then I am interested in the deal.
I choose cash flow as my metric becase investing for appreciation is speculative and if you speculate incorrectly you get burned. Ask anyone who was investing in hot markets in 2008.
The economy can collapse and cash flow property still works.
I happen to live in the best cash flow market in America so its easy for me, but there are a lot of good cash flow markets out there. Find one of them, learn the market, and start buying.
To your success
thanks for the reply josh,
When you are speaking of using cash as your metric is that just in regards to rentals? Or would you use the same metric for rehabbing? And when you say cash flow your just speaking of the income you can bring in from the property minus the expenses from that property?
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