Planning to buy this property, https://table.investments/portfolio/201-elm-midwest/. This is my first REI, can you suggest/advice if this is a good investment?
Midwest City is a good place for rentals. As far as whether particular property is a good investment or not will depend on what your criteria for a good investment is. You will first have to figure out what metric are using to decide that. Once you figure that out, then you can decide whether this property will fall into those specifications and whether it is a good investment for you.
Midwest City is a good place for rentals. As far as whether particular property is a good investment or not will depend on what your criteria for a good investment is. You will first have to figure out what metric are using to decide that. Once you figure that out, then you can decide whether this property will fall into those specifications and whether it is a good investment for you.
Thank you for your response. I am looking fot atleast 10% return and good neighborhood with low to less crime.
This property seems to fit all those, i am little worried this being my first investment and also out of state investment, what other due diligence should i be doing.
I would interview property managers and make sure you get a solid one in there if there isn't one already.
Also, the pictures are from before the property was leased. If there are tenants in there, I would request current pictures to make sure you know the current condition.
I would ask to review lease documents, payment history and find out what their tenant selection process was. You want to make sure they actually did some verification on the tenants prior to moving them in. These will be your tenants as soon as transaction closes, so you want to find out what you can about them.
Like Cassi says, Midwest City is a decent area, but I would be careful being an out of State investors. I would consider that part of Midwest City a high D or C area. At that rental rate, tenants will be everything and being out of State just adds to that headache. Your property manager will make or break you.
Also, not seeing where you are getting a 10% return. If you paid cash, have no repair contingency, and don't have a PM, your return is 9%. You should be adding those into your figures for the return.
I see a lot of properties in that area go up for sale from out of state investors for the reasons above, Del City is a similar type area. Tenants with rents under $700 are 50/50 at best. Most people only have luck with those properties when they are local and can keep an eye on things.
Cassi gives good advice, it could be a great investment, depending on your appetite for risk. I can see it going sideways really quick if you get a bad tenant or property manager.
I also wouldn't plan on appreciation in that area. Oklahoma City stays pretty steady, no big swings one way or another. As an example, that particular property sold for 27k in 1998. In 2015, it sold for 42k.
10% return is difficult in this market where everyone is overypaying for properties. Just like the 2% rule that changed to the 1% rule, to now investors think any cash flow is good.
Just keep looking, you'll find something. Just don't expect them to be easy to find any more.