Any Charleston investors?

Question

Interested in investing in Charleston and subsequently relocating there myself. How much money would it take to generate 800-1,200 dollars a month in cash flow and what would be the fastest / best course to get to the above? Lets assume I can save 20-40K a year to use for investing. Any advice or insight will be much apreciated.

Jon Holdman · Answer

Rental real estate is a cash on cash investment game.   If you get 10% cash on cash you're doing pretty good.  With that return, $1000 a month, $12,000 a year in true cash flow (not rent-PITI) would require an investment of $100,000. If you manage them yourself, you can significantly increase your income, at the price of doing the PM job.

Medellin Heel · Answer

My goal is to

1) Generate 800 - 1,200 dollars a month from buy / hold

2) Have my own personal property mostly paid off or at the least a small mortgage payment ie 500 dollars

3) Buy / Refurbish / Sell 1 - 2 properties a year for an additional 12,000 - 40,000 dollars

Need to figure out a game plan / strategy for this and how long I will need to work abroad saving money assuming me alone can save 25,000 - 35,000 a year. Starting out anyways.

Blake C. · Answer

Jon has given great advice about rentals being a cash on cash game. To expand my cash flow on limited captial, I have focused hard on the cash on cash number. As Jon said, I have fund that you can do better at this by managing yourself and doing so in the lower working class neighborhoods. This means I don't invest in the neighborhood that i want to live in or to people that I typically run in a social circle, but its still not a scary place to be at night. The hassle factor is a little higher, its not as easy to sell these properties to an owner-buyer on exit, but the cash flow as a function of purchase price is much greater. As a result, I can get greater than 15% cash on cash return.

The increased return has its draw backs (property management, increased hassle, and lower liquidity, ect).

Another thing you can do to increase cash on cash is to finance with a mortgage. This route you can lock in a lower interest rate for a fixed period of time. There are some downsides to going mortgage as well... higher closing fees, and no LLCs.

Elizabeth Colegrove · Answer

@Medellin Heel

Welcome to bigger pockets. We own 2 houses in Summerville. Charleston was the first place we invested. We buy in higher end areas that are easy to manage long distance. My husband active duty military so we move alot. We bought 2 houses for 90k and we rented them out for 1250. The biggest problem with Summerville is taxes. Taxes is 3% and insurance is high. So make sure you budget that!

Any Charleston investors?

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