For Those Buying 100-200k Homes

[Aaron Rowzee]

For those of you buying the 100-200k range, I have a few questions: do you ever get a 2% rent to value on your purchase, and what is your specific strategy at this price point?

In my area I'm shopping for under $70k houses that require a bit of rehab that follow Brandon Turner's numbers (12% CoC, 2% RtV, and $200/mo per door). It's hard for me to imagine buying in the mid range and actually achieving those goals without a house requiring extensive rehab.

I also had my CPA tell me not to buy between 80k-180k because the profit margins were too tight. Is this because of my specific area or are you guys actually getting $3k/mo on a $150k home?

[Cody L.]

Short answer is "no". When people claim to get 2% they're buying a $40k dump that they rent for $800.

Honestly I'd rather have a nicer $150-200k home I could rent to solid tents for 1% ($1,500-$2000). I repair believe that's the better play.

I do have a few sub $100k homes (70-90k) that I rent for $1000-1200 but those were from early on.