I need to change strategies. What should I do?
Member since 2024 · 23 posts · 19 votes
I need to change strategies. What should I do?
Most Popular Reply
Theresa HarrisPro Member
Member since 2019 · 15k+ posts · 11k+ votesIf you want a 3% return, honestly put it in the bank in a good savings account. With the current interest rates, you'll get a better return. No you won't benefit from the tenant paying down your mortgage or the house appreciating, but you also won't have to deal with tenants, maintaining the home, etc.
47 Replies
- 1yTheresa HarrisPro MemberMember since 2019 · 15k+ posts · 11k+ votes
If you want a 3% return, honestly put it in the bank in a good savings account. With the current interest rates, you'll get a better return. No you won't benefit from the tenant paying down your mortgage or the house appreciating, but you also won't have to deal with tenants, maintaining the home, etc.
- Member since 2024 · 23 posts · 19 votes1y
I don't want a 3% return. I want more. I just mentioned 3% because I cannot even find anything that produces that.
So I am wondering what other ways can I invest in RE - 1yDennis McNeelyPro MemberInvestor · Gibraltar, MI · Member since 2017 · 108 posts · 103 votes
Consider investing as a partner or lender with someone in an area such as the Rust Belt that does produce cash flow - but keep in mind that the long-term trade off will likely be less appreciation for that investment.
- Lender · Brunswick County, NC · Member since 2019 · 20 posts · 21 votes1y
You'll need to look outside of those markets and be open to long distance investing. There's quite a bit of opportunity in the Carolina's. I'd be happy to crunch some numbers with you and send some options. With that type of savings you could buy several properties and hit the ground running! :)
- 1yBruce WoodruffPro MemberContractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
You are on the right track....you can look in another market as @Charles Hoyer said, or you can change your search criteria in your own market. I always looked for 'distressed' properties as that is a great way to grab some extra equity appreciation. Also take a chance and look in 'D' areas that you suspect that are heading upward (gentrifying) towards C or maybe even B.
- 1yJoe VilleneuvePro MemberPlymouth, MI · Member since 2013 · 13k+ posts · 19k+ votes
What other strategies do you know?
- Lender · Houston · Member since 2023 · 14 posts · 5 votes1y
You're right—finding cash-flowing properties with 20-30% down in Tampa is tough right now with high prices and high interest rates. Instead of focusing on move-in-ready rentals, consider fixing up a cheaper property (BRRRR method) to add value and boost cash flow. You can also try creative financing like seller financing or taking over a seller's mortgage to avoid big upfront costs. If local deals don't work, look at cheaper markets out of state where rental returns are better. Another option is house hacking—buying a small multi-unit, living in one, and renting the rest to cut costs. If long-term rentals don't cash flow, short-term or mid-term rentals (Airbnb, traveling nurses, corporate stays) might work better. You could also team up with another investor to afford better deals or start wholesaling to build cash before buying rentals. The market has changed, but if you're flexible, there are still plenty of ways to invest.
- Rental Property Investor · CO · Member since 2024 · 19 posts · 6 votes1y
I work with a company that you should utilize to analyze the different properties you are looking at right now. I have found them helpful for my investors.
- 1yRaymond J. RodriguesBusiness MemberLender · Miami, FL · Member since 2017 · 1k+ posts · 797 votes
@Ivan Castanon, I might be able to recommend you to someone that’s local to the area that can help you going in the right direction. He’s a close friend of mine. Send me a pm and we can chat further on this.
Helm Mortgage Corp.5125 Reviews - Investor · Arroyo Grande, CA · Member since 2014 · 1k+ posts · 1k+ votes1y
Hey Ivan,
I get where you’re coming from—finding cash-flowing properties with 20-30% down in a lot of markets is tough right now. I invest in Detroit, where we’re still seeing plenty of deals that cash flow well, even in today’s market. Prices are still relatively low compared to many other metros, and rental demand remains strong.
I built my portfolio to 12 doors there while living in Detroit (now back in California) and have seen firsthand how the right strategy can still work. It does take knowing the market and having the right team in place, but if you’re open to looking at different areas, I’m happy to share more insights or point you to some resources.
Let me know if you want to chat more about it!
- Real Estate Agent · Atlanta, GA · Member since 2020 · 1k+ posts · 1k+ votes1y
@Ivan Castanon, if you're open to new investment strategies, research and explore co-living rentals since Tampa and Orlando are part of your target markets. I'm specifically referring to PadSplit, a rent-by-the-room company/platform that operates in those respective areas.
- Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes1y
Private lending is the way to go
7e investments53 Reviews - 1yDrew SygitBusiness MemberProperty Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
Can’t find a rental property to cashflow?
You’re probably thinking you have to offer asking price – not true!
To determine what to offer on a rental property:
- Determine reasonable market rent, NOT the highest!
- Deduct NEW property taxes after you buy
- Deduct home insurance costs
- Deduct maintenance percentage, typically 10%
- Deduct vacancy+tenant nonperformance percentage
(we recommend 5% for Class A, 10% Class B, 20% Class C, good luck with Class D) - Deduct whatever dollar/percentage of cashflow you want
Now, what you have left over is the amount for debt service.
Enter it into a mortgage calculator, with current interest rate for an investment property, to determine your maximum mortgage amount.
Divide the mortgage amount by either 75% or 80%, depending on the required down payment percentage - this is your tentative price to offer.
If the property needs repairs, you'll want to deduct 110%-120% of the estimated repairs from this amount.
Be sure to also research the ARV and make sure it's 10-20% higher than your tentative purchase price.
As long as the ARV checks out, this is the purchase price to offer.
It is probably significantly below the asking price. Who cares? If you pay more, you won't meet your metrics and will probably have negative cashflow and/or equity.
You may have to make 10, 20 or even 100 offers to get one accepted at the price that meets your numbers.
This is what all investors did BEFORE the Great Real Estate Crash of 2008-2010.
Logical Property Management4.9451 Reviews - 1yShiloh LundahlPro MemberRental Property Investor · Gilbert, AZ · Member since 2016 · 3k+ posts · 4k+ votes
Hi @Ivan Castanon. A lot of people are giving you advice without enough context as to what you would like to do other than get a higher than 3% cash on cash return and other than only putting down 20% - 30% as a down payment.
Something that is important to know to give proper suggestions is what you want the investment to do for you and how active you want to be in the investment.
In general, the more active you are, the higher your return, the less active you are, the lower the return because you pay for others to do that work for you. Information like: Do you want to manage the property yourself, or do you want to pay a property management company to do that for you, is important to know because it will start to narrow your options.
If you want to be more of an active investor, finding the deal yourself direct from a seller, doing some of the work yourself to fix it up, and then representing yourself to sell it on your own is probably the most active you can be and will give you the highest return in the shortest amount of time. Also, co-living situations or top performing short-term rentals can produce a pretty high cash on cash return but again they are pretty active with a high turnover of tenants and guests unless you find someone else to manage them and then you are usually paying a good portion of the profits to the manager.
But let's say that you have a job and are not interested in fixing and flipping or a high turnover type of investment and you would rather be a more passive investor. If that is the case, here are some more passive, yet higher return options.
1. As@Chris Seveney suggested, being a private money lender can be pretty passive once you find the operator and asset you feel comfortable with. You can get between a 12% and 15% cash on cash return each year pretty passively. But what is really important is that you understand the terms of the loan, including the length of time and when you can expect to get the money back, how it is secured, and the process of getting it back if things don't go as planned with the investment. Vetting the operator or borrower is very important. Make sure that that person has a lot of experience, and make sure that there is at least 20% - 25% equity over and above the amount that you have lent and in your agreement it states that they can have no other liens or loans on top of yours. Also, make sure that they have money in their accounts in case things don't go as planned. You don't want to get a call 3 months into a project where you have lent money and hear the operator say that they ran out of money and need more money from you to finish the project or you will lose your investment. But if you can find a good operator and feel good about the asset, then private money lending can be an excellent way to invest passively. I have done this probably over 100 times as the borrower and it has worked out well for me and my private money lenders in that everyone has gotten paid back along with the agreed upon interest.
2. Putting your money into a fund or syndication. This is similar to being a private money lender. You need to vet the investment and the operator. In some syndications, returns may be higher than 15%, but it can be more risky in that there are usually many people involved and if the operator doesn't perform as originally explained then the process of getting your money back can be a little more tricky. I haven't personally done a syndication so I can't comment much more from experience.
3. As @Dennis McNeely stated you could partner up with someone else on a deal or deals. For example, a buddy of mine called me the other day and told me that his accounted told him that he should buy some real estate to offset some of his taxes. I gave him some ideas of what he could do depending on if he wanted to be more passive or more active. After explaining a couple of options he told me he would rather just partner up with me and be the money partner and I would be the operating partner. So we opened up an LLC and he funded it with $100,000. I then found 3 properties from wholesalers in areas that I invest in regularly and purchased the properties with a hard money loan. We used his money as the down payment and to fix up the properties. We have stabilized 2 properties so far and we are in the middle of the refinance on the second. We will finish with the rehab on the third in about a month or 2 and then we will refinance that one as well. The cash flow won't be that high on these properties initially, but we are not planning on keeping them long term. We have placed tenant buyers in the property on lease options so we get a little higher rents and the tenant buyers take care of the property repairs. The option period is for 3 years. We set the purchase price at about 10% higher than todays value and we don't have to pay for realtor fees or closing costs when we go to sell the property. We also connect them with loan officers to help get the tenant buyers ready to purchase the property within the option time frame. Each of the properties have an estimated profit of around $70,000. So the total estimated profit is $210,000 in 3 years. So a profit of around $105,000 each in 3 years. So about a 35% cash on cash return for my buddy each year on his $100,000. Now I realize that not all situations will go exactly as planned but it is important to have a realistic plan from the beginning based on past results.
Ivan, Hopefully this post was helpful to you in that it helped you consider different options based on your personal situation and real estate investing goals. Let me know if I can be of help to you on your journey.
- 1yRobert EllisBusiness MemberDeveloper · Miami, FL · Member since 2014 · 3k+ posts · 1k+ votes
Quote from @Ivan Castanon:
For the past 6 months I’ve been looking for houses (both SF and MF) that can produce at least a little bit of cashflow with around 20% - 30% down.
However, I’ve started to realize that this is pretty much impossible these days.
I currently have $110k sitting in my bank ready to be invested but I just can't find anything that will at least produce a 3% COC return. I've been looking for properties in and around Tampa, Orlando, and St Pete but I can't find anything that's worth it.
I’m starting to realize that I need a new strategy. I can’t keep looking for properties that will cashflow because I feel like I’m wasting my time at this point. I really want to invest in RE but I just don’t know what to do. Any recommendations? What other ways can I invest in RE in the current market.
Ivan, I totally get where you’re coming from. The current market makes it tough to find solid cash-flowing deals, especially with 20-30% down. I’ve been focusing on building triplexes in Columbus, Ohio, and it’s been a game-changer. Instead of buying at today’s inflated prices, I develop from the ground up, creating built-in equity and higher cash flow from Day 1.
If you’re open to new construction, Columbus has great zoning options and strong rental demand.
Section 8 Launch52 Reviews - 1yJoe VilleneuvePro MemberPlymouth, MI · Member since 2013 · 13k+ posts · 19k+ votesPaying a higher DP (30%) to turn NCF into PCF is an illusion. All you're doing is paying for that NCF upfront.
Quote from @Cameron Valentine:
You're right—finding cash-flowing properties with 20-30% down in Tampa is tough right now with high prices and high interest rates. Instead of focusing on move-in-ready rentals, consider fixing up a cheaper property (BRRRR method) to add value and boost cash flow. You can also try creative financing like seller financing or taking over a seller's mortgage to avoid big upfront costs. If local deals don't work, look at cheaper markets out of state where rental returns are better. Another option is house hacking—buying a small multi-unit, living in one, and renting the rest to cut costs. If long-term rentals don't cash flow, short-term or mid-term rentals (Airbnb, traveling nurses, corporate stays) might work better. You could also team up with another investor to afford better deals or start wholesaling to build cash before buying rentals. The market has changed, but if you're flexible, there are still plenty of ways to invest.
- 1yJimmy LieuBusiness MemberReal Estate Agent · Columbus, OH · Member since 2019 · 3k+ posts · 2k+ votes
Quote from @Ivan Castanon:
For the past 6 months I’ve been looking for houses (both SF and MF) that can produce at least a little bit of cashflow with around 20% - 30% down.
However, I’ve started to realize that this is pretty much impossible these days.
I currently have $110k sitting in my bank ready to be invested but I just can't find anything that will at least produce a 3% COC return. I've been looking for properties in and around Tampa, Orlando, and St Pete but I can't find anything that's worth it.
I’m starting to realize that I need a new strategy. I can’t keep looking for properties that will cashflow because I feel like I’m wasting my time at this point. I really want to invest in RE but I just don’t know what to do. Any recommendations? What other ways can I invest in RE in the current market.
Hi Ivan! I would recommend taking a look at Columbus Ohio! With $110k cash, you can easily buy 2-3 positive cash flowing rentals here. The macroeconomics are on fire here - population growth, job growth, and companies moving and developing here. For example Intel headquarters, Google, FB, Amazon, Nationwide, Honda, (recently Anduril announced another 4k jobs to Columbus). Additionally, the price point is still cheap enough to find the 1% rule and positive cash flow and there's amazing appreciation potential. Lastly, the price point is still very cheap here in the sense that you can still find investment deals that hit the 1% rule for 120-180k! Happy to connect and answer any questions you have!
Jimmy Lieu, Red 1 Realty4.9120 Reviews - 1yMike PaolucciBusiness MemberRealtor · Columbus Cleveland Dayton, OH · Member since 2022 · 492 posts · 549 votes
Quote from @Ivan Castanon:
For the past 6 months I’ve been looking for houses (both SF and MF) that can produce at least a little bit of cashflow with around 20% - 30% down.
However, I’ve started to realize that this is pretty much impossible these days.
I currently have $110k sitting in my bank ready to be invested but I just can't find anything that will at least produce a 3% COC return. I've been looking for properties in and around Tampa, Orlando, and St Pete but I can't find anything that's worth it.
I’m starting to realize that I need a new strategy. I can’t keep looking for properties that will cashflow because I feel like I’m wasting my time at this point. I really want to invest in RE but I just don’t know what to do. Any recommendations? What other ways can I invest in RE in the current market.
Ran into the same issue back in 2021 while living in Northern Cali. I ended up looking out of state and settled on the Ohio markets. I'd recommend looking at Cleveland, Dayton and maybe couple other markets in Ohio.
You can also look into REITS but I prefer owning my asset and not sharing with anyone I'm not in business with.
Reafco - Mike Paolucci 512 Reviews - 1yTravis TimmonsPro MemberRental Property Investor · Ellsworth, ME · Member since 2021 · 1k+ posts · 2k+ votes
We're in a "What can you do that is really hard?" market. Looking on zillow and running numbers is not hard. The juice has been squeezed out of the market. There are simply too many people looking for a deal that they can find on the market and walk into cash flow with long term rentals.
- 1yJorge VazquezBusiness MemberReal Estate Broker · Tampa, FL · Member since 2017 · 1k+ posts · 679 votes
Hi Ivan,
Yeah, it’s been tough, especially the last couple of years, but the deals are still out there—you just need the right strategy and team. Instead of focusing only on Tampa or St. Pete, try looking at cities within an hour of those areas.
Lately, I’ve actually been seeing more properties hit the 1% rule, which hasn’t happened in a while. A lot of sellers are panicking, thinking the market’s going to crash, but they don’t really understand what’s happening behind the scenes—demand is still strong, people are still moving to Florida, and that creates opportunities.
I own 32 properties, and I’m always tracking values—rents, insurance, taxes, all of it. Right now, I’m seeing rents starting to go back up, insurance costs dropping, and even taxes flattening out. Plus, rental demand is picking up again, which is a good sign.
I can point to at least five properties that are hitting solid numbers now when they weren’t just a few months ago. A big part of that was the insurance crisis, but that’s settling. Even on my own properties, I’ve seen insurance rates drop a lot, and that makes a huge difference.
Rents dipped about 10% over the last year, which made everything look worse than it really was. But if you get in now and hold for the next cycle, by year two or three, those numbers will look way better. I’ve been doing this for 20 years, and I’ve seen this pattern before—it’s all about timing and patience.
Let me know if you want to chat more about this!
— Jorge
Graystone Investment Group4.6268 Reviews - 1yJake AndronicoBusiness MemberRealtor · Reno, NV · Member since 2019 · 1k+ posts · 938 votes
Need to get more creative. Assuming a loan, juicing cash flow, being aggressive in offers and asking the seller to pay a huge seller credit, etc.
It's not easy, but definitely possible.
- Member since 2024 · 23 posts · 19 votes1y
Quote from @Chris Seveney:
Private lending is the way to go
Hello Chris, thank you for your comment. Do know of any resources (books, courses, YouTube videos, etc.) to get educated on private money lending?
- 1ySam McCormackBusiness MemberReal Estate Agent · Cincinnati, OH/NKY · Member since 2021 · 1k+ posts · 833 votes
Quote from @Ivan Castanon:
For the past 6 months I’ve been looking for houses (both SF and MF) that can produce at least a little bit of cashflow with around 20% - 30% down.
However, I’ve started to realize that this is pretty much impossible these days.
I currently have $110k sitting in my bank ready to be invested but I just can't find anything that will at least produce a 3% COC return. I've been looking for properties in and around Tampa, Orlando, and St Pete but I can't find anything that's worth it.
I’m starting to realize that I need a new strategy. I can’t keep looking for properties that will cashflow because I feel like I’m wasting my time at this point. I really want to invest in RE but I just don’t know what to do. Any recommendations? What other ways can I invest in RE in the current market.
Hey Ivan, is there a reason you are specifically Tampa, Orlando, etc? If you are looking for more cash flow specifically, would you be open to other markets? And if the area is important, I just ask, what is more important? Cash flow now? (not the future) Or the market?
Sam McCormack Realtor - Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes1y
Apparently @Ivan Castanon most want to try to sell you on something vs answer the question.
Ugh....
There is the options of totally change up what/where your trying to do things.
I suggest before that, get heavily networked into your target market. namely with the older investors. Older the better.
Look up ideal existing performing properties, your "hero's" as it were, find out who own's it, and reach out to them.
Explain your situation, your looking to "get in" and would love to just buy em a coffee and pick the brain of a local "pro" for a bit if possible. I am betting your gonna find a lot more friendly amicable persons than shut doors.
From there, do exactly that. Share where your at, what your doing, the headaches your running into and ask for their advice. Than be smart, site back and listen, take it all in, be a good student.
Do this enough I guarantee you will get great info, insight, and just maybe an old timer ready to retire out who's open to seeing what they can do to make a deal work. You may just stumble into seller financing if play your cards right. At worst, fair chance of some quality mentors.
I say start there, exhaust your local efforts before jumping toward "shiny things" and unknown markets, persons etc..
- Member since 2019 · 60 posts · 31 votes1y
@James Hamling I agree, I didn't see where Ivan talked much about his team and networking contacts but for me those are most important to me being able to stay relevant and successful in my local market. I may have to flip a couple of houses now before I find one I want to keep or be the lender to a LLC on a project but being in contact with others who are doing successful deals is the only way it works for me.
- 1ySamuel DioufBusiness MemberReal Estate Agent · Columbus & Cleveland, OH · Member since 2023 · 1k+ posts · 1k+ votes
Hey Ivan, you could look elsewhere. I'm from Florida and started investing in the Ohio markets because of the numbers making more since here from a cash-flow standpoint and the state is seeing massive growth too.
Reafco - Samuel Diouf528 Reviews
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