Trouble finding cash flow + single homes

5 Replies

I'm a current homeowner and new investor - I keep running into an issue finding cash positive single homes. 

First off - Primary reason I am interested in single homes is I believe they will be easier to sell in the future

I've ran the the Biggerpockets calculator on rental homes and a few others and even with "cheap" homes (<140K) I am having trouble getting them cash flow positive. 

Screenshots from a recent calc I ran (I continuously run into this issue):


I've been looking at houses in the 120-140K range in the area that I live. I can put 20% down no problem...the issue is getting these cash positive while charging a competitive rent rate. I will have to have a property manager initially just due to my lack of experience and that I work out of the country for weeks at a time. 


@Jeremy Horton CF and SFR is a challenge these days for sure. You need to find distressed properties that can be rehabbed and repositioned. SFR is easier to sell and will show better appreciation-generally; but CF will be modest. It is a tough market consider duplexes and four plexes that need rehab. All the best!

@Jeremy Horton First of all I will like to Congratulate you because you are already doing what many wanna be investors don't do very often (Analyzing Deals).

Yes, 90% of great market has been very competitive since March 2020 due to low inventory (The Law of Demand and Supply) and historically low interest rate (money is cheap).

Since you did not specify your market, I will suggest you may try any or combination of the following and see it it helps your situation:

  • Increase your down-payment
  • Be more realistic with CapEx (If property is newer or recently remodeled)
  • Manage it yourself for the first 1 year if possible
  • Identify and work with honest and experience wholesalers
  • Put in some sweat equity if you have the risk tolerance and willing to take that route.

Goodluck and don't give-up. You will get one soon

If success were easy, everyone would find it. Get out and hustle. Instead of just looking at what's on the market, find properties that haven't been put on the market yet. BiggerPockets is full of advise on how to do that. 

I am currently under contract for a property with three residential rentals and 157 storage units. How did I find it? I called every storage facility in town and asked if they were ready to sell. On the third call, this owner called me back and we negotiated a deal. I'm buying it for $100,000 below appraisal from three years ago and 50% of ARV.

Learn. Hustle. Work harder than the rest. The only place where success comes before work is in the dictionary.

Originally posted by @Wale Lawal :

@Jeremy Horton First of all I will like to Congratulate you because you are already doing what many wanna be investors don't do very often (Analyzing Deals).

Yes, 90% of great market has been very competitive since March 2020 due to low inventory (The Law of Demand and Supply) and historically low interest rate (money is cheap).

Since you did not specify your market, I will suggest you may try any or combination of the following and see it it helps your situation: - I'm in Louisiana, not the best place to probably invest in housing due to the nature of the industry (lots of oilfield), population of state is decreasing etc etc. This is another kicker for me, not sure how much it will actually effect me in 10 years or so though

  • Increase your down-payment - This seems like the most logical step. I also have a lot invested in Mutual Funds...and I run into the dilemma...hmmm should I put an extra 10K down on this house or would I do better putting 10K in the market and making ~7% each year. Tough decisions...but good decisions to have to make I suppose

  • Be more realistic with CapEx (If property is newer or recently remodeled) - Another good one...the house I'm currently in I plan on renting when we move...so I'll already have equity in it and will have replaced everything that may need attention in the coming years

  • Manage it yourself for the first 1 year if possible - I plan on doing this in the long term. Probably going to need help getting started, then once I figure out what they do and how they do it, I will do it myself. Depends on my work situation/location as well. 

  • Identify and work with honest and experience wholesalers - Ehhh - will have to read up on this, not a huge fan of wholesalers 

  • Put in some sweat equity if you have the risk tolerance and willing to take that route. - This as well, I plan on making small upgrades (ie: flooring/kitcheb/bathroom) to houses before I sell to ideally get the value up OR just make them easier to sell. 

Goodluck and don't give-up. You will get one soon - THANKS for the reply, encouragement and things to look at. I'll tweak some things and wait for the right deal to pop up. Currently talking to some realtor friends as well. 

 

Originally posted by @Nathan G. :

If success were easy, everyone would find it. Get out and hustle. Instead of just looking at what's on the market, find properties that haven't been put on the market yet. BiggerPockets is full of advise on how to do that. 

I am currently under contract for a property with three residential rentals and 157 storage units. How did I find it? I called every storage facility in town and asked if they were ready to sell. On the third call, this owner called me back and we negotiated a deal. I'm buying it for $100,000 below appraisal from three years ago and 50% of ARV.

Learn. Hustle. Work harder than the rest. The only place where success comes before work is in the dictionary.

Bolded what I think is the key - I understand the "work harder" la, la, la, the real estate industry is full of "hard work makes you successful...I just make more because I work harder" type, especially online. Of course you have to work hard to be successful. Not trying to be rude here, and I appreciate your reply!


Finding off market deals (by working hard) is the message I believe you're saying. This is a good point!