Cash is King or Queen

10 Replies

Hi Everyone

Just wondering where investors are sourcing cash cows?

Yes, I imagine a question asked every day of the week.

Sometimes the only way to do this is doing something outside the square. This requires more work, something like a distressed property and adding value. This may mean networking and finding deals prior to hitting the market. Not always easy, but I have been doing this

So many markets have been rising since 2011, its getting much more difficult to source good cash flowing properties.

I started in Atlanta, but the competition is fierce and very difficult for the numbers to stack up today.

Now I am moving on to Detroit, this is a gold mine, but be wary investors there are good neighborhoods and bad, get this wrong and it will like flushing money down the toilet.

Looking forward to hearing about your experiences.

@Ricardo Carey

Sadly inventory is very low in Atlanta and prices have soared.

I am not really sure Atlanta makes anymore sense in terms of cash flowing.

Still seeing prices rise, but you will need deep pockets to hold these properties. Even multi units dont make sense, and the competition for these are fierce.

Detroit is great for cash flow and it is now fast becoming a hot market

I purchased a couple of good deals off MLS in Atlanta this year. A wholesaler brought me two others. I slacked on mailings this year. 50/50 off/on market has been my experience in the past. My volume is down because there aren't as many attractive deals and I'm being more cautious.

I probably will continue to work Atlanta because it offers decent returns and a good chance at appreciation over the long haul.  

@Rick Baggenstoss When you find these deals on the MLS, are the deals mostly on new listings? I am trying to learn how to spot great deals on the MLS but they all seem like inflated numbers.

I think it's important to be open to deals that are different than what we've been buying. Change strategies. 

For example, I just got 2 deals, that aren't great deals, but, yet, I'm very happy about them, because they cashflow and I expect the values to increase a lot. They're still way below the market crash, when these 2008 constructed townhomes sold in low 200's. 

Builder went belly up, foreclosures, HOA didn't have enough money coming in to keep things nice and it was downhill from there. Took years to come back up. Pool was green with algae. Now they have new HOA, pool is getting new pump. Just west of Ft. McPherson, bidding wars on both of these homes, as it's hard for buyers to get anything nice and livable in this price range ITP.

1) paid 140K, 3 story with garage, about 2000 sqf. Got immediate tenant for 1600.00 month. Didn't have to do anything. 

2) Am closing Friday. 119K. Short-sale and owner had dog, kept in garage - reeks to high heaven. Stripper pole in lower bedroom. Needs new carpet on 2 levels and dealing with garage and new appliances. Have already people flying in on Saturday to see this, as they sold house in NJ and moving down. They answered ad for the 1st one. $ 1600

Are they 'cash cows'? No. And they're not the kind of deals I had been doing. But I had a 1031K and needed to do something with the funds and felt that these were really underrated and had a ways to go up, due to location and demand for lower price ranges. Got good mortgages on both. And I'm burned out on rehab right now. But they give me good return and I'm feel good about them. 

Clearly if you look hard enough the deals are still around in Atlanta. 

Good for everyone that is making this market work

Really ticked off today a wholesaler in Atlanta offering me $50k on my property worth $150k..... how dare they..... lol

Thought I was going to say Yes

Originally posted by @Marisa R. :

Really ticked off today a wholesaler in Atlanta offering me $50k on my property worth $150k..... how dare they..... lol

Thought I was going to say Yes

 but....they are providing a "service" LOL!

@Marisa R.

You are correct, deals have become more and more tougher to source especially in the metro Atlanta areas and I'm sure in major cities as well. My strategy is focusing on off-market deals in rural areas that support a growing population and job growth. I mainly focus on apartment communites so I've been looking around Middle Ga, Greenville SC, Chattanooga TN and Birmingham AL to name a few. Some of these aren't necessarily rural, but have been seeing better returns vs. Atlanta. I have a buddy that focuses his flipping/wholesaling business up in Detroit and he has been doing great, but at the same time as you mentioned there are pockets that you need to be very careful of. Best of Luck!!!