How do you determine your criteria for your next property? Buy & Hold investors

14 Replies

Hello BP,


How do you choose your next investment property from a buy & hold stand point? 

My first couple of properties I got "lucky" because the market was at it's bottom and it was easy to find a renter to slide right in and getting a 10% cap and it was relatively close to my personal residence (10-15 minutes away). 

I will be closing on a 4plex soon that will also have something north of a 10 cap but it is an hour away (which I'm completely fine with) but I feel sooner or later I'll just keep searching for more and better deals further and further away or do not meet criteria.

Do some of you have criteria put into place? In example..

1) 10% cap

2) within 90 minutes 

3) great schools

4) low crime, no sex offenders

5) Cash flow MF - $125/door? $150/door? etc...

6) Cash flow per SFH - $350/door

May some of you post some ideas that I am missing and you've completely used that has benefited you and your success? I do not want to get caught up and miss some pictures. What are your goals and plans for growing your buy and hold portfolio?

I look for $25,000 or less per door, with at least $100/mo cash flow per door.  C+ to B neighborhoods.  Location is a personal preference.  Long distance is ok, just make sure you have a good management company in place.

Hope this helps, best of success!

Where do you find $25,000 per door now days? Just curious

The next property criteria is the same for every property I buy, have bought, and will buy.

1 - I must get enough "cash" back at the time of my first REFI (within 1 month...usually less) to move onto the next deal.

2 - At the time of the 2nd REFI (the one I get to hold the property with), I must cash flow a minimum of 300/month after all expenses (including a PM) and the debt on the REFI.

3 - I must recover all the cash I put into the deal within the first year.  This can come from the REFI's and cash flow, but I must get it all back so I have snso cash at risk in my deal after the first year.  Usually though, I have it all back before the 2nd REFI through the 1st REFI and cash flow before the 2nd REFI

@Joe Villeneuve

I'm barely seeing above $100 in my analysis let alone $300. How are you getting this? What types and condition properties are you buying if you don't mind sharing?

Originally posted by @Daria B. :

@Joe Villeneuve

I'm barely seeing above $100 in my analysis let alone $300. How are you getting this? What types and condition properties are you buying if you don't mind sharing?

Buy/rehab right around 50k. ARV = 65-80k

Rents = 900-1100/month.

None of the properties are Warzone.  Nice communities. 

Originally posted by @Joe Villeneuve :
Originally posted by @Daria B.:

@Joe Villeneuve

I'm barely seeing above $100 in my analysis let alone $300. How are you getting this? What types and condition properties are you buying if you don't mind sharing?

Buy/rehab right around 50k. ARV = 65-80k

Rents = 900-1100/month.

None of the properties are Warzone.  Nice communities. 

 Ah! Ok nice, lucky you.! My area has horrible property in not so nice areas. They aren't warzones but won't command good rent relative to fixing and renting.

Looking for my next deal in an area that is good but every seller must have had a meeting to price the property at the same $$$ when they are all far above the comps. 

You've got quite a good system. I read your method in another post for buying, refi, rent and continue all without contributing $$ to the refi'd - next property. 

Originally posted by @Daria B. :
Originally posted by @Joe Villeneuve:
Originally posted by @Daria B.:

@Joe Villeneuve

I'm barely seeing above $100 in my analysis let alone $300. How are you getting this? What types and condition properties are you buying if you don't mind sharing?

Buy/rehab right around 50k. ARV = 65-80k

Rents = 900-1100/month.

None of the properties are Warzone.  Nice communities. 

 Ah! Ok nice, lucky you.! My area has horrible property in not so nice areas. They aren't warzones but won't command good rent relative to fixing and renting.

Looking for my next deal in an area that is good but every seller must have had a meeting to price the property at the same $$$ when they are all far above the comps. 

You've got quite a good system. I read your method in another post for buying, refi, rent and continue all without contributing $$ to the refi'd - next property. 

 Ever hear the following:

Man goes to the Doctor and tells him it hurts when I raise my arm.

The Doctor says, "So don't raise your arm". 

Originally posted by @Joe Villeneuve :
Originally posted by @Daria B.:
Originally posted by @Joe Villeneuve:
Originally posted by @Daria B.:

@Joe Villeneuve

I'm barely seeing above $100 in my analysis let alone $300. How are you getting this? What types and condition properties are you buying if you don't mind sharing?

Buy/rehab right around 50k. ARV = 65-80k

Rents = 900-1100/month.

None of the properties are Warzone.  Nice communities. 

 Ah! Ok nice, lucky you.! My area has horrible property in not so nice areas. They aren't warzones but won't command good rent relative to fixing and renting.

Looking for my next deal in an area that is good but every seller must have had a meeting to price the property at the same $$$ when they are all far above the comps. 

You've got quite a good system. I read your method in another post for buying, refi, rent and continue all without contributing $$ to the refi'd - next property. 

 Ever hear the following:

Man goes to the Doctor and tells him it hurts when I raise my arm.

The Doctor says, "So don't raise your arm". 

Clearly this is an obtuse moment for me. Ok I get the saying but how does that apply? 

Originally posted by @Daria B. :
Originally posted by @Joe Villeneuve:
Originally posted by @Daria B.:
Originally posted by @Joe Villeneuve:
Originally posted by @Daria B.:

@Joe Villeneuve

I'm barely seeing above $100 in my analysis let alone $300. How are you getting this? What types and condition properties are you buying if you don't mind sharing?

Buy/rehab right around 50k. ARV = 65-80k

Rents = 900-1100/month.

None of the properties are Warzone.  Nice communities. 

 Ah! Ok nice, lucky you.! My area has horrible property in not so nice areas. They aren't warzones but won't command good rent relative to fixing and renting.

Looking for my next deal in an area that is good but every seller must have had a meeting to price the property at the same $$$ when they are all far above the comps. 

You've got quite a good system. I read your method in another post for buying, refi, rent and continue all without contributing $$ to the refi'd - next property. 

 Ever hear the following:

Man goes to the Doctor and tells him it hurts when I raise my arm.

The Doctor says, "So don't raise your arm". 

Clearly this is an obtuse moment for me. Ok I get the saying but how does that apply? 

 If the market you are trying to invest in "hurts" when you do it...don't do it.  Invest in a different market.

Originally posted by @Joe Villeneuve :
Originally posted by @Daria B.:
Originally posted by @Joe Villeneuve:
Originally posted by @Daria B.:
Originally posted by @Joe Villeneuve:
Originally posted by @Daria B.:

@Joe Villeneuve

I'm barely seeing above $100 in my analysis let alone $300. How are you getting this? What types and condition properties are you buying if you don't mind sharing?

Buy/rehab right around 50k. ARV = 65-80k

Rents = 900-1100/month.

None of the properties are Warzone.  Nice communities. 

 Ah! Ok nice, lucky you.! My area has horrible property in not so nice areas. They aren't warzones but won't command good rent relative to fixing and renting.

Looking for my next deal in an area that is good but every seller must have had a meeting to price the property at the same $$$ when they are all far above the comps. 

You've got quite a good system. I read your method in another post for buying, refi, rent and continue all without contributing $$ to the refi'd - next property. 

 Ever hear the following:

Man goes to the Doctor and tells him it hurts when I raise my arm.

The Doctor says, "So don't raise your arm". 

Clearly this is an obtuse moment for me. Ok I get the saying but how does that apply? 

 If the market you are trying to invest in "hurts" when you do it...don't do it.  Invest in a different market.

Thumbs up!

I like cash on cash return of +15%.


Frank

These are my current criteria

Within 90 minutes drive of me.

10% Cap Rates

Cash Flow $375+

My target properties are 1/1 and 2/2 Condos.  I only do a 2+ bedrooms if it is 1978 or newer because of the lead paint issues.

Join the Largest Real Estate Investing Community

Basic membership is free, forever.

By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.