When buyers are looking to invest in a single family home to use as a rental investment that has a tenant in place, do they look to buy at 70% LTV or are they going to look more at the cash flow even if the price is at 85% LTV but has say a 12-15% CAP rate and no repairs or upgrades are needed
There is no such thing as a Cap rate on a SFH.
@Ed Kahle I can't speak for others. But for myself, I'm running the numbers to make sure I can hit the cash flow I want on a monthly basis. I focus on buy and hold. Others who are doing flips or rehabs often use the 70% principle as one metric to analyze a property. That would mean they want to pay (ARV (after repair value) x .70 )- repair costs. They use that 70% to make sure there is profit for them when they sell it or so that a bank will refinance it and they can take their cash back out.
Many buyers who plan on investing in single family homes look at the rent versus purchase. I know "I" personally always plan on finding my own tenants!
Create Lasting Wealth Through Real Estate
Join the millions of people achieving financial freedom through the power of real estate investing