Rental #16 under contract!

[Dawn Anastasi]

My rental property goal was 16 properties. And now I'm under contract on rental #16!

It's a 3 bedroom, 1 bath property with a 2.5 car garage and partially fenced in yard located just 7 houses down from a rental I already own, so I know the neighborhood.

Purchase price = $27,900

Will rent for $850-875 per month.

[Joel Owens]

Vincent most investors I know do not hold for 15 to 30 years on a single property. You calculate an opportune time to sell for your alternative investment property. You then sell the property with a 1031 before the large capex hits into a newer property unless you hold for redevelopment. 

One negative is not much depreciation with these cheaper houses. Another is type of tenant is more time intensive to manage.

I think it is great what Dawn is accomplishing.  

The largest wealth gains I see by investors are not cash flow related but buying at the right time in the cycle and then doing a 1031 into another area or asset class that hasn't peaked yet.

By constantly taking advantage of market conditions you have larger equity gains. So for instance if a property had 200 month cash flow after expenses for 2,400 a year and another property had 1,200 a year based on cash flow the 2,400 would look more appealing.

Fast forward 5 years and the higher cash flow property hasn't appreciated much but the one with less cash flow has risen quite substantially. So when the equity gain is factored in the less cash flow outperformed the higher cash flow property for overall returns. 

This is not always the case but typically lower end areas are all cash flow, middle areas a mix of cash flow and good equity growth, and higher end areas little cash flow and the most equity growth. 

What investors want and desire depends on the investor. Those making 50k a year at the job wanting to replace that income with cash flow so they can move to real estate full time will be focused on higher cash flow even if more time intensive.

Those making 500k a year tend  to have a different investing philosophy. It's more about quality of the area and property with the least mount of headache, good equity growth upside, and cash flow is much farther down the list.