Buy and Hold Rental SFR

[Franky Juwana]

I'm about to purchase my first Buy and Hold SFR, Most the properties rental around 1% out of the asking price and tax about 2% from the asking price. So I started from there, then I went a little deeper and using Biggerpockets Rental Calculator and started plugin the numbers.

After seeing the results, mostly the cash flow is negative and Cap Rate is not even close to 5%. Am I looking at the wrong location? 

My questions are;

1. What are you strategies to achieve at least $100 cash flow after all expenses. 

2. Can you guys share any unique method to offer the seller without insulting with low ball offer. Is there any incentive that I could offer to make it attractive?

3. This is outta state rental, so I know resources is kinda limited and is it wise to buy a property that need rehab or just buy the one that ready to move in. 

Thank you so much in advance

[Chris Youssi]

We have purchased 30 SFR since 2015 and prefer this method of investing far and away more than any other opportunity. Here are my thoughts :

After seeing the results, mostly the cash flow is negative and Cap Rate is not even close to 5%. Am I looking at the wrong location?

My questions are;

1. What are you strategies to achieve at least $100 cash flow after all expenses. Personally I would never consider anything less than $300 / month unless there was huge upside potential. Eg... purchased a prop for 95k put 8k into it  n while rehabbing from time of purchase to deposit made on home was 8 days.Taxes were obscene but got them reduced for 2018 tax year. Currently cash flows for $258 next year it will be around $450 /m

2. Can you guys share any unique method to offer the seller without insulting with low ball offer. Is there any incentive that I could offer to make it attractive? I would move onto another opportunity

3. This is outta state rental, so I know resources is kinda limited and is it wise to buy a property that need rehab or just buy the one that ready to move in. out of state investing very difficult as I have done both and am no down to only 2 units in Florida - at one time we had 8. I would stay close to home until you have a larger portfolio. I see you are from NY but surely there are opportunities that cash flow within a 1 hour drive? Maybe I'm way off base. If so forgive me in advance.

Meanwhile best wishes