Turnkey, good manager, but Low DCR

[Carol Frome]

Would you take a chance on a turnkey SFR (no big capital expenditures necessary) with a DCR of .89 if you had an excellent property manager with a track record regarding vacancies? I've been operating on the assumption that I should have a 1.25 or better DCR.

[Dan Kelley]

My bank likes to see 1.25. Not sure why you'd want to take negative cash flow? Even if it's managed excellently and there are no vacancies, you're still negative or, at best, break even. I personally don't like the idea of purchasing negatively cash-flowing properties in the hopes that it will appreciate. You can likely find plenty of properties that will appreciate AND cash flow at the same time.