Miami First Deal - SFH buy and hold rental

5 Replies

Hey Everyone,

I have read the forum for years and finally making my first post. I am a new RE investor. My objective is buy and hold for the long haul. I have invested in stocks for years, but I see much more advantages to RE. I have been very cautious about picking my first property. I came across a few single family homes in miami with 6-8 cap rate with little rehab needed. My investor friends tell me to sit on my hands and wait for a gem especially for my first deal. I have been cautious/ patient but I am ready to get in the game. Is a 7 cap single family property in miami a good enough starting point? I am going to use conventional financing 20% down. Thank you for the help!!

I would suggest you try get at least an 8 cap. Being that you are closing with a bank loan you will be mostly limited to on-market MLS properties.

Maybe you can find a way to hold on to your downpayment and find a better deal with an owner finance situation. 

Thank you @Noe Perrin . That makes a lot of sense. Any specific ways to find seller financing deals?

Look at a lot of deals. you where to do a direct mail campaign is target homes with lots of equity to increase your chance of finding someone open to that.

Cap rate is secondary issue with SFH. They are very high risk due to vacancies. If you want a higher return with less risk you need to invest in a multi. Stay away from SFHs, too risky with much higher expense ratio. Invest in purpose built rental properties.

Welcome @Jonathan P. ! When looking at potential return, defining "good enough" is up to you - it's your money/investment! For example, I would not personally hold a property delivering just a 7% return, because I can get a lot more by lending out my money. But if your money is just sitting in a savings account earning a fraction of a %, then a 7% return would be better. SFH are even further complicated by the fact that you also have to take appreciation into account.

Also, if these deals you are seeing aren't good enough, I don't think you should count on a gem to just come to you...If a gem is what you are looking for, I think you're going to have to go out there and look for it. 

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