Having trouble finding a deal

Having trouble finding a deal

Member since 2020 · 2 posts · 0 votes

Hello BP. I've been educating myself on real estate investing over the past few months. I have all the tools at my fingertips and know what my goals and limitations are. I'm finding it very hard to locate a buy-and-hold rental that will bring in $100 cash flow, 10% COC, 12%ROI property. It seems that no matter the purchase price, in order to get these numbers the rent will have to be higher than the area can support. Is this a sign to hold off and wait for a market change? I've built a team of brokers, lenders and property managers that are helping, but finding even a single property that meets my investment goals are just not there.

As an example, I plan on borrowing $130K, 20% down, 5% APR. To reach my goal, rent would have to be at least $1,450/mo. Houses at that price (and even 20-30K higher ask price) are only pulling in $900-$1,200/mo.

Any help would be appreciated because at this point my analysis paralysis is preventing any forward movement.

Thanks,

Dan

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  • Rental Property Investor · Greenwich, CT · Member since 2015 · 4k+ posts · 2k+ votes
    6y

    Probably can't happen on SFR in your area, @Daniel Gray. That's not uncommon. Once SFHs hit $120-150k or above, the price-to-rent ratio gets out of whack and they are very difficult to cash flow at your criteria, if at all. Look to MFR.

  • Member since 2020 · 2 posts · 0 votes
    6y

    Thanks guys. I have found short term cash flowing deals in low ranking areas, but my main goal is medium range appreciation. The area has appreciated but not at eyebrow raising levels. They are mostly townhomes that haven’t grown more than a few percent over the course of 5 years. I’m tempted to get in for the short term cash flow, but just so I can barely make a profit on a 7 year turn? I’m tempted to search beyond my local area to get something closer to ensure my short and medium range goals are met. 

    Dan

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