Seeing cash flow opportunity markets--please be specific

10 Replies

I am a retired military officer, disabled vet (10 year Terminal Attack Controller during my enlisted years--destroyed knees jumping out of planes), and 30 year real estate investor.  Did I mention my knees are bad?  So-o walk me to a market that has cash flow and decent property managers.  ready ready go!!!

@Tommy Ray

I feel you on bad knees! I have had three knee surgeries so far and about 25 jumps. There are numerous markets out there that can provide cash flow. For example, in the Alabama market, before the great bidding wars of 2021, you could still find 1% rules or close to them. I also like the Tennesse market, I have not invested yet, but the numbers make sense. 

It really comes down to your goals and the regions you want to buy in. I am focused on northern Alabama and Tennessee because I plan to retire there one day. What type of investments are you looking for, multifamily or SFH? 

Sincerely, 

Josh 

60 jumps!  One knee surgery.  Exploded the ACL and tore the MCL.  Knee looked like egg drop soup when they scoped it.  I have 26 units in TN now.  I am getting cash flow and appreciation but the market is too close to Nashville and costs / values are skyrocketing too much to re-enter it at the top of the market.  

I have not really looked there.  I need to have a team - prop mgr, trades, and alike to solve my issues before I own stuff there.  I gain the support team before I gain assets...  I do not like to have the tail wag the dog...  When it does it turns investing into a job

@Tommy Ray

I've purchased over 30 SFH rentals in Detroit, most of which I own free and clear. Some of them I've bought tenant occupied. Most of them I bought distressed, rehabbed, and rented. I've helped a dozen or so other investors get started in the market, as well. We have a full-service team in place to help investors (in-state and out of state) earn passive income investing in Detroit.

As I’m writing this, most of the properties we are purchasing right now are in the $40k-45K (purchase and rehab) range and rent for $800/month. After PM, taxes, insurance, and maintenance, we typically bring home $500/month on average, per property.

Its still tough to get mortgages in Detroit, especially if you're trying to capitlize on properties in neighborhoods that are undervalued (which is our strategy).

We're not a turnkey company. We are investors who were In the market before 2008, stayed in during the crash of 2008, and now have a strong position in the market today.

We’ve literally built our wealth investing when there’s blood in the streets. That’s not the mindset of most investors. We are perfectly fine holding our properties forever and cash flowing them to the grave, which is also unlike most investors.

By the way, despite all the madness of COVID, eviction memorandums etc. we had our best year of rental income, in 2020!

If this sounds like something you'd be interested in or if you have general question, let's connect.

Metro Detroit offers many options for meeting the 1% Rule and relatively high ROI.

The two most common mistakes we see investors make, over & over again, are:

1) Not understanding and running their own ROI numbers

2) Not having a clear understanding of the type of asset a property is

In our opinion, your best team member should be your Property Management Company (PMC). They have to deal with any property you buy every month until you sell or terminate them. Everyone else on your team will be transaction-based and not really involved after a purchase.

We're in the Metro Detroit area, so you may want to follow our blog here on BP, but at least read the following posts:

Follow our "Deep Dive" series we're doing about Metro Detroit cities and City of Detroit Neighborhoods: https://www.biggerpockets.com/...

How to “Screen a PMC Better than a Tenant”: https://www.biggerpockets.com/member-blogs/3094/91877-how-to-screen-a-pmc-better-than-a-tenant-part-1-services-and-processes

@Drew Sygit I agree - all investors should run their own numbers & understand their own numbers.  Like Warren Buffet advises, it's best to invest in something we understand.

Joshua Macmillon this is in response to your 1% rule.  I am targeting 2% rule for acquisition.  Have gotten up to 4% buy and rehab 45K basis for 1800 a month gross rental income within a market that was skewed heavy supply and low demand.  Net root issue was low market confidence and a supply of housing inventory that had excessive deferred maintenance.  Fewer reliable trades resulted in a tactic of buying with 1031 cash, importing labor, rehabbing to a nicer rental level, and resetting the leasing base w/4 good tenants.