Mississippi Single Family buy & hold

New to Real Estate · Castle Rock, CO · Member since 2014 · 172 posts · 66 votes

Looking for some feedback on my numbers. Also any input on any thing I might be missing or have completely wrong. Review numbers here.

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Robin SimonBusiness Member

Lender · Austin, TX · Member since 2022 · 5k+ posts · 4k+ votes

Think the numbers look solid and conservative (3% appreciation / 2% rent growth) - leaves some room for upside surprise!

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Susan Maneck
Investor · Jackson, MS · Member since 2014 · 1k+ posts · 769 votes
4y
The price looks right to me, but I sure hate that interest rate!
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Robin SimonBusiness Member
Lender · Austin, TX · Member since 2022 · 5k+ posts · 4k+ votes
4y
Think the numbers look solid and conservative (3% appreciation / 2% rent growth) - leaves some room for upside surprise!
[email protected]
Harpoon Capital514 Reviews
Website View Page
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Nathan Patterson
OP
New to Real Estate · Castle Rock, CO · Member since 2014 · 172 posts · 66 votes
4y
Quote from @Susan Maneck:

The price looks right to me, but I sure hate that interest rate!

I agree, it depends on which loan I go with. I put in the highest interest rate to see if it would still work.
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Nathan Patterson
OP
New to Real Estate · Castle Rock, CO · Member since 2014 · 172 posts · 66 votes
4y
Quote from @Robin Simon:

Think the numbers look solid and conservative (3% appreciation / 2% rent growth) - leaves some room for upside surprise!

Yep, I wasn't sure what to go with since it is Mississippi & it is my first property.
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Susan Maneck
Investor · Jackson, MS · Member since 2014 · 1k+ posts · 769 votes
4y
You can't count on 3% appreciation in Mississippi. The last time there was appreciation in Mississippi before the pandemic was in the wake of Hurricane Katrina. Also, keep in mind that Mississippi still hasn't raised its minimum wage from $7.25 so there are limits as to how much rent can be raised.
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Nathan Patterson
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New to Real Estate · Castle Rock, CO · Member since 2014 · 172 posts · 66 votes
4y
Quote from @Susan Maneck:

You can't count on 3% appreciation in Mississippi. The last time there was appreciation in Mississippi before the pandemic was in the wake of Hurricane Katrina. Also, keep in mind that Mississippi still hasn't raised its minimum wage from $7.25 so there are limits as to how much rent can be raised.

That is great information. Do you know what appreciation you typically see?
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Susan Maneck
Investor · Jackson, MS · Member since 2014 · 1k+ posts · 769 votes
4y
Quote from @Nathan Patterson:

Quote from @Susan Maneck:

You can't count on 3% appreciation in Mississippi. The last time there was appreciation in Mississippi before the pandemic was in the wake of Hurricane Katrina. Also, keep in mind that Mississippi still hasn't raised its minimum wage from $7.25 so there are limits as to how much rent can be raised.

That is great information. Do you know what appreciation you typically see?
Honestly, I can't give you a figure. When I bought my first house in Mississippi it appreciated for the first four years. Then when the Great Recession hit I found my house (which was purchased from HUD) was now under water. I figured I could either cry about that or buy up the neighborhood. Over the next eight years I started buying up one property after another but it wasn't until the pandemic hit that my original house could be sold for a profit and then not by much. In fact, if I figure in my upgrades I probably lost money.
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Jason Quisberth
New to Real Estate · Santa Barbara, CA · Member since 2020 · 2 posts · 0 votes
4y
Property Management seems low at 23$/mo, consider a rate closer to 10% of rent unless you are always managing it.
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Nathan Patterson
OP
New to Real Estate · Castle Rock, CO · Member since 2014 · 172 posts · 66 votes
4y
Quote from @Susan Maneck:

Quote from @Nathan Patterson:

Quote from @Susan Maneck:

You can't count on 3% appreciation in Mississippi. The last time there was appreciation in Mississippi before the pandemic was in the wake of Hurricane Katrina. Also, keep in mind that Mississippi still hasn't raised its minimum wage from $7.25 so there are limits as to how much rent can be raised.

That is great information. Do you know what appreciation you typically see?
Honestly, I can't give you a figure. When I bought my first house in Mississippi it appreciated for the first four years. Then when the Great Recession hit I found my house (which was purchased from HUD) was now under water. I figured I could either cry about that or buy up the neighborhood. Over the next eight years I started buying up one property after another but it wasn't until the pandemic hit that my original house could be sold for a profit and then not by much. In fact, if I figure in my upgrades I probably lost money.

Wow, that did take some time to recoup. I think I'll change my appreciation number to 1% then. It seems like the majority of Mississippi does not appreciate, unless your on the coast.
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Susan Maneck
Investor · Jackson, MS · Member since 2014 · 1k+ posts · 769 votes
4y
Properties have appreciated all over Mississippi during the pandemic but I only buy properties here when it makes sense in terms of rental income, I don't count of appreciation and I don't think you should either. However, I'm seeing that more and more investors are looking seriously at Mississippi, probably because the numbers don't work out any place else. As for coast, personally I wouldn't buy there after what happened with Katrina. Insurance companies found all kinds of ways not to reimburse people for their losses. One place in Mississippi where appreciation appears to be more the norm is closer to Memphis. Still, I think the house you are looking at is a good deal.
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Susan Maneck
Investor · Jackson, MS · Member since 2014 · 1k+ posts · 769 votes
4y
Quote from @Jason Quisberth:

Property Management seems low at 23$/mo, consider a rate closer to 10% of rent unless you are always managing it.

My property manager in Mississippi charges 8%.
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