Cashflow in houston expected per $50,000 investment

16 Replies

hi bigger pockets I am new and live in houston texas. I was wondering for those of you that are in houston what type of monthly cashflow can be expected when purchasing a sfr in houston. I will have about 50000 to invest and am wondering what type of rental would earn the best return per month. My goal is to slowly over time build up to about 5,000 per month in cash flow, thanks for any advice you can give

@Bobby Barlow

There isn't straight "you will make $XX with a $50,000 Investment" .... There are too many variables.

Will you pay cash for a $50,000 property?

Will you buy two properties with a $25,000 down payment each?

Will you buy one property and use the majority of the $50,000 for a down payment?

All of these scenarios will probably have different cash flow numbers. 

jeff

Are you asking how to get a gross cash flow of $5k per month or net cash flow (profit)?  I expect a cap rate of more than 10% for any buy and hold properties.  I need a minimum monthly profit per property of $200.  If you are looking for 120% of your $60k back every year then you must concentrate on buying with as little cash down and employ financing partners.  That's what I do buying subject to properties and working with partners who finance deals 100% in return for a secured rate of return - the "Zero" down properties.  

I wouldn't rush to blow that $50k on two properties immediately.

I think you should look at turn key deals....if you have a full time gig. Then wait until you have collected at least 6-12 months worth of rent then buy another sfr.

Maybe after the 1st or 2nd sfr purchase, you may want to do a flip to replenish your free cash to have enough down payment for your 3rd and 4th property.

@David Gardner what kind of down payment would be required to get a turnkey property that produces 200 per month in cashflow after all expenses including capex, mainetence, management, principal and interest etc.(everything)

Originally posted by @Daniel Okorie :

I wouldn't rush to blow that $50k on two properties immediately.

I think you should look at turn key deals....if you have a full time gig. Then wait until you have collected at least 6-12 months worth of rent then buy another sfr.

Maybe after the 1st or 2nd sfr purchase, you may want to do a flip to replenish your free cash to have enough down payment for your 3rd and 4th property.

I have thought about turn keys  but I will say this I found one on the Norada sight that is about a mile from my house. It is 15511 pebble lake in the 77095 zip. They didn't post the adress only the street name.i drove over there to see if I could find it and I did. They are rehabbing it. I compared the pics and sure enough that was it. It seems to be overpriced by 20-30k to me. My neighbor is running comps so we will see. Also the rent estimate seems high to me as well. They say 1550 but I think it's more like 1350.

Hi @Bobby Barlow ,

Thanks for bringing that up.  I've asked our Houston partner to look into the market value and rental comps for me to check and verify those numbers.  Obviously we don't want it to be over-priced as that wouldn't be good for anyone, let alone not being able to appraise for financing.

Please let me know if you have any questions.

Thanks Bobby.

Originally posted by @Ray A. :

Hi @Bobby Barlow, welcome to BP. I'm a Realtor in the Copperfield area, if you'd like to sit down and review the numbers, I'd be more than happy to. Feel free to PM me.

 thanks Ray i will message you