How would you allocate this moeny

Question

I am looking to buy several homes. I have recently purchased a home in Huntsville, and one last year in Austin. I am looking to add approximately 1-2 homes per quarter and like the price range of 200,000-325,000. Rents tend to be 1700-2000 range. Anyone want to share where else I should be looking?

Any thoughts are appreciated.

Michael K Gallagher · Answer

@Nate Secor I'd agree with @Marc Rice and @Steven Wilson about Columbus OH.  In that price range you can get into duplexes as well here and increase the gross monthly rent over a single family.  Depending where in the area you buy you can get into a nicely rehabbed on market duplex for that price range, that should fetch in the $950-$1200 per side range (that's fairly conservative, depending on the area you can push 1400 per side), again depending on the property itself and location.

James Wise · Answer

If you're in Cleveland $275k should get you 3 duplexes or 4-5 single family homes.

Steven Foster Wilson · Answer

Hey Nate,

Personally I would buy in a secondary market like here in Columbus OH, and focus on small multifamily, that way you can utilize easy to get leverage, and maximize cashflow and appreciation.

Caleb Brown · Answer

The suburbs outside Kansas City are similar to that. You'll be in A-B areas with a R/V ratio ranging from .5-.9

Marc Rice · Answer

@Nate Secor

You should be able to achieve that in the Midwest through buying in A/B class neighborhoods. In Columbus, you’ll be closer to the $225-275k with rents about $1,650-2,000/mo. In other markets like Dayton and Cleveland you can have purchase prices lower than $275k with slightly lower rents also.

Adrien C. · Answer

I would focus on finding the right people first. Don't get caught up in the BP theology of only buying homes with specific specs because some of those specs aren't common in older midwest areas but there's plenty of inventory that makes a good rental, rents fast, and is easy to sell when the time is needed. If I suggested anything, I would look for houses that have minimal cap-ex needed. Between material prices and labor prices skyrocketing like dogecoin, it's better to buy something that doesn't need major work.

With your price range, you should be able to find plenty of houses in A/B neighborhoods that are probably pulling in more rent than you mentioned. That's why your team is more valuable. If you have a bad team, owning a 3/2 1500sqft home with 2 car garage meets BP standards, but it still sucks. Your team is what makes the rental $$$ for you.

Anna Laud · Answer

@Nate Secor

Hi Nate!

This is actually a very interesting question in your numbers as I can tell you that this purchase price point range fits into some Class A and Class B areas in landlord friendly Indiana, specifically some areas outside of the usual investor go to of Marion County and into that of Hamilton County.

Straight from the MLS, I'm looking at a 4/2.5, just over 3,200 SqFt listed at $315K with an average area rent of $2100/mo in a Class A area. It's got an HOA annually of $325, move in/rent ready now with noting on seller's disclosure as significant defect, noted roof is 7 years old with commercial kitchen updates, playground area, etc.

Semi annual taxes here are $1239, and cap out at 2% non owner occupied, out of State owners. So your purchase price point and projected monthly rental criteria are defiantly doable in Indiana, and beyond Marion county alone, into Hamilton County in the areas of Carmel, Noblesville, Fishers, Westfield and Zionsville (Class A areas).

Bottom line, that's a very decent budget to work with for a long term buy and hold in Indiana and bumps you up to Class A and B areas if that's part of your criteria.

Happy to help you see more of these if you'd like- unless I'm totally missing the mark here and this is not what you mean! Let me know if you'd like me to message you with the address for pics for a better idea, or a more in depth overview of any of the areas that I've mentioned.

Hope that helps some!

Ruth Phillips · Answer

Hi Nate! I would probably consider looking into the Oklahoma Metro Area Market - Those numbers are definitely doable here.

Lindsay Davis · Answer

You mention you're not too concerned with cash flow- are you primarily then looking to value appreciation, and maybe getting the property paid off as a hedge against inflation? If you're looking to accomplish these goals, with as you said "less headaches" I would probably recommend working with an experienced turnkey service in your designated location- or outside- that's kind of the beauty of turnkey. They handle all of the legwork, you make the final decision, and you essentially exchange time for x value, which depends on the firm and the individual deal.

Nate Secor · Answer

I am mostly looking for new homes. 2010 to new construction with exceptions.  I like the tenants, and I don’t need that much cash flow as I’ve already sort of gotten over the top on that. I already pass on money for freedom since I make more than I need, so I’m looking for less headaches while still having real estate as an inflation hedge.

How would you allocate this moeny

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