Nothing will cashflow.

Rochester, MI · Member since 2014 · 88 posts · 50 votes

Anyone still thinking that they are going to find profitable deals like duplexes, fourplexes, and good singles family home to rent at potentially 6% or 7% interest rates and current asking prices?

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Bill F.

Investor · Boston, MA · Member since 2015 · 1k+ posts · 3k+ votes

Quote from @Joe Villeneuve:

Quote from @Chad S.:

@Joe Villeneuve

Yeah, but I'm not interested in D class properties though. Not my cup of tea.

Who said anything about Class D properties?

shhhhhhh... let him keep thinking that rentals have only every worked with rates below 5% and no REI happened before 2009. More for the rest of us that remember the land before low low rates.

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Joe VilleneuvePro Member
Plymouth, MI · Member since 2013 · 13k+ posts · 19k+ votes
4y
All the time. Why not? The problem isn't that they don't exist, the problem is they don't exist in the market you may be looking in.
29 Reply
David Garner
Investor · Ellwood City, PA · Member since 2019 · 93 posts · 124 votes
4y
Quote from @Chad S.:

Anyone still thinking that they are going to find profitable deals like duplexes, fourplexes, and good singles family home to rent at potentially 6% or 7% interest rates and current asking prices?
Hey Chad... in my case, yes. I pay 9% interest only using private money and everything still cashflows. Maybe investors that have a model that relies on 4% money might struggle to maintain that in the near term. They'll either have to pause or pivot. Hopefully that'll leave more deals on the table for me, but I doubt it. If the deal only worked with 4% money then it definitely won't work for me.

Good luck with whatever you choose to do.

DG

11 Reply
Lawrence Potts
Real Estate Agent · Member since 2018 · 459 posts · 414 votes
4y
Chad,
Depends on where you're looking and who you're renting to. Have you thought about short-term rentals? Maybe traveling workers? And what about your market? Can you buy a SFR and build an ADU? Are you finding deals off-market? Maybe bring on a partner and look at other markets? We are missing some important details. You can find cashflow anywhere and you can make cashflow work, it entirely depends on your metrics, your goals, and your market. Take what the market is giving you and adjust. In some markets, you can't be rigid and looking at deals the same way everyone else is. Define your target audience, how much they are willing to pay, and what they are willing to pay for. Then you'll find out what you need to find and how much you need to make it work. Then you'll find out where to find those deals. And sometimes the deal goes a different direction. My first deal I ever bought I tried to house hack but it didn't pan out that way, the numbers didn't work. I ended up selling it and got myself a 4-unit with the profits. But I wouldn't have been able to buy that 4-unit if I didn't have that deal. You have to be creative and make deals. Hope that helps!
13 Reply
Chad S.
OP
Rochester, MI · Member since 2014 · 88 posts · 50 votes
4y
@Joe Villeneuve
Yeah, but I'm not interested in D class properties though. Not my cup of tea.
4 Reply
Chad S.
OP
Rochester, MI · Member since 2014 · 88 posts · 50 votes
4y
@Lawrence Potts
Your right. Completely agree.
1 Reply
Joe VilleneuvePro Member
Plymouth, MI · Member since 2013 · 13k+ posts · 19k+ votes
4y
Quote from @Chad S.:

@Joe Villeneuve
Yeah, but I'm not interested in D class properties though. Not my cup of tea.
Who said anything about Class D properties?
3 Reply
Bill F.
Investor · Boston, MA · Member since 2015 · 1k+ posts · 3k+ votes
4y
Quote from @Joe Villeneuve:

Quote from @Chad S.:

@Joe Villeneuve
Yeah, but I'm not interested in D class properties though. Not my cup of tea.
Who said anything about Class D properties?

shhhhhhh... let him keep thinking that rentals have only every worked with rates below 5% and no REI happened before 2009. More for the rest of us that remember the land before low low rates.
29 Reply
Theresa HarrisPro Member
Member since 2019 · 15k+ posts · 11k+ votes
4y
Quote from @Chad S.:

@Joe Villeneuve
Yeah, but I'm not interested in D class properties though. Not my cup of tea.

You don't have to look at D class. Try a different city. I can look in two different towns and what $300K will buy are vastly different. Have you thought about remote investing? Buy places in other towns where the cost of homes is less.
8 Reply
Terrell Garren
Rental Property Investor · Concord, NC · Member since 2016 · 1k+ posts · 3k+ votes
4y
The graph reminds me of the popularity of assuming a seller's mortgage around '80 - '90. A house for sale with a 6% assumable mortgage was quite attractive in '83. Given today's loan qualification requirements, it sounds like I am just making stuff up.
1 Reply
Joe VilleneuvePro Member
Plymouth, MI · Member since 2013 · 13k+ posts · 19k+ votes
4y
Quote from @Bill F.:

Quote from @Joe Villeneuve:

Quote from @Chad S.:

@Joe Villeneuve
Yeah, but I'm not interested in D class properties though. Not my cup of tea.
Who said anything about Class D properties?

shhhhhhh... let him keep thinking that rentals have only every worked with rates below 5% and no REI happened before 2009. More for the rest of us that remember the land before low low rates.
LOL. You're right of course. My bad. Sorry Bill, but I couldn't resist. Maybe because I thought it should be obvious.
2 Reply
Nathan GesnerBusiness Member
Moderator
Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
4y
Educate yourself on different markets and cast a wider net. There are still cash flowing properties to be had if you're willing to put in the work.
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Matthew Paul
Severna Park, MD · Member since 2013 · 7k+ posts · 7k+ votes
4y
Just pay cash . It will cash flow great right away .
13 Reply
Russell BrazilBusiness Member
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Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
4y
Ive been hearing nothing cash flows for the last 20 years. They say it when interest rates are normal, they say it when they are low. They say it when prices are high, they say it when prices are low.
I guess Ill just keep on buying this real estate that everyone else is so skeptical of, and Ill keep getting rich while those who continue to find reasons to not buy keep staying broke.
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Jon KellyPro Member
Investor · Bethlehem, PA · Member since 2016 · 929 posts · 951 votes
4y
What option do you have? Sit on the sidelines and wait for the right time (who knows when that will be) or do a little more legwork and try to finds deals?
4 Reply
Michael Deering
Rental Property Investor · Lehigh Valley, PA · Member since 2017 · 200 posts · 191 votes
4y
yes
1 Reply
Joe HammelBusiness Member
Real Estate Agent · Metro Detroit, MI · Member since 2018 · 612 posts · 666 votes
4y
@Chad S.
We close 20+ cash flowing single family homes a month, here in Metro Detroit.
Perhaps it’s your analysis?
Interest rates will only hurt cash flow by $20-$40/month and nothing rising rents can’t cancel out.
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Joe VilleneuvePro Member
Plymouth, MI · Member since 2013 · 13k+ posts · 19k+ votes
4y
Quote from @Matthew Paul:

Just pay cash . It will cash flow great right away .
...and all that does is pay all that NCF up front.
2 Reply
Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
4y
Quote from @Terrell Garren:

The graph reminds me of the popularity of assuming a seller's mortgage around '80 - '90. A house for sale with a 6% assumable mortgage was quite attractive in '83. Given today's loan qualification requirements, it sounds like I am just making stuff up.

its how i was able to move to the napa valley in 92.. 5k down assume the loan had to pay 10k tranfer fee to the country club.. so 15k total cash for a 425k purchase on a house that sold in 89 for 650k.. are we headed there ???
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5 Reply
Louis Zameryka
New York, NY · Member since 2020 · 105 posts · 49 votes
4y
@Chad S. I’ve felt that way too. Especially trying to get my first deal the last 12 months.
In fact I was working the math on a 4-plex deal tonight that just might cash flow based on current rents if I approach the offer correctly and get the right financing... and I live just outside of NYC. So buying anything is a high price.
I’m a rookie though and there is a chance I mess up with my numbers or my execution and I go from $100 cash flow a month on $6300 in monthly rent income projected to -$200 a month until I can raise rents at the end of the leases but...if I learn some stuff in the process and lose $2400 over the next year... it’s like I paid for a cheap seminar where I got to get my hands real dirty too.
...that being said... if any more experienced investor wants to mentor me quick tomorrow before I make an offer tomorrow night or Monday please reach out.. I’d love a pep talk and some advice.
9 Reply
Eliott Elias
Investor · Austin, TX · Member since 2021 · 9k+ posts · 5k+ votes
4y
Look at secondary or territory markets if you are not finding them in your market. Look into investing out of state
3 Reply
Joe VilleneuvePro Member
Plymouth, MI · Member since 2013 · 13k+ posts · 19k+ votes
4y
Quote from @Louis Zameryka:

@Chad S. I’ve felt that way too. Especially trying to get my first deal the last 12 months.
In fact I was working the math on a 4-plex deal tonight that just might cash flow based on current rents if I approach the offer correctly and get the right financing... and I live just outside of NYC. So buying anything is a high price.
I’m a rookie though and there is a chance I mess up with my numbers or my execution and I go from $100 cash flow a month on $6300 in monthly rent income projected to -$200 a month until I can raise rents at the end of the leases but...if I learn some stuff in the process and lose $2400 over the next year... it’s like I paid for a cheap seminar where I got to get my hands real dirty too.
...that being said... if any more experienced investor wants to mentor me quick tomorrow before I make an offer tomorrow night or Monday please reach out.. I’d love a pep talk and some advice.
PM me
5 Reply
Steve Donovan
Rental Property Investor · Green Bay, WI · Member since 2016 · 150 posts · 94 votes
4y
If you can't find properties that cashflow in your area, you need to widen your search. They are out there, probably just not in your own market. Some people buy knowing there will be little to no cashflow in the short-term, banking on appreciation. I have always thought that was a gamble not worth taking, and it is even more risky in this time of rising interest rates. All the best to everyone in their investing future; there are interesting times ahead!
4 Reply
Chad S.
OP
Rochester, MI · Member since 2014 · 88 posts · 50 votes
4y
@Steve Donovan
I might explore the short term rental option for diversity. My game is just looking for good solid in demand rental property in good school districts. Mine are in rural areas outside the big cities.
I work and my only goal is to hit my freedom number with the least amount of property to retire. I'm halfway there. If cost to borrow would have stayed low it would have been quicker but I will still get there.
7 Reply
Cliff H.Pro Member
Rental Property Investor · Nashua, NH · Member since 2014 · 587 posts · 477 votes
4y
@Chad S. looking over the list of folks responding here and the sheer magnitude of collective experience they have, you could literally PM a single one of them and likely double your profitability overnight. Sometimes the best gift a friend can offer is a different way of looking at the same scene.
9 Reply
Katherine Wiltse
Real Estate Agent · Ava, MO · Member since 2022 · 31 posts · 45 votes
4y
This era may demand more creativity and a more finely tuned mindset to succeed, but many will do just that. Millionaires were made during the depression era and they certainly didn't look around and throw their hands up. They rolled up their sleeves.
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