@Brett D. - what about OOS options with a light/handyman rehab? I've done this in markets like Huntsville where I'm only spending $5-10k to get it rent ready and they cash flow pretty well. Yes I use a PM, but that removes most of the headaches for me.
@Joel Hutchinson I am very big into research, so I tend to spend a lot of time looking into new markets, building my "core four", etc., and Huntsville was a good distance to Nashville where I own SFR, and not too far from Atlanta, which to me was a nice location. Large Army base there, but I also saw a lot of new things happening. Here's a 2019 article:
Where is this property? As stated by others, your COC return is low, however, if it has appreciation probability along with potential to increase rents down the road or lower expenses, then perhaps it could work. One concern I have on the appreciation side is that this is a prefab home and depending on community, could hinder future appreciation.
As far as sitting on the sidelines, don't do that, but do continue to investigate, ask for others help (as you have been doing here) and keep learning and saving. Perhaps do a quick flip to gain more experience and additional capital for down payments on future acquisitions for buy and hold. Plenty of options out there.
@Joe Steele I am also a realtor and just started OOS investing in Huntsville this year. Would love to connect with you to get your insight on things there!
$30,000 to make rent ready (includes $3500 two months holding costs)
$1141 mortgage (25% down at 3.125% for 30 years)
$381 taxes
$75 insurance
$150 HOA
$141 vacancy (6%)
$265 maintenance and capex (12%)
$2350 rent
$197 cash flow
$400,000 - $405,000 ARV
I think this one is accurate compared to my last attempt. Thoughts appreciated.
Brett
Why not buy in Lancaster or Palmdale? You can buy multifamily properties and sfh with the same or lower price points and 3-5x your cash flow. If you hate the AV, I would still buy here in hopes of making more money to be able to atleast buy homes in my desired market. I really do not like condos in this market, as a personal preference. Just a thought.
So, the property fell through. It turns out, there was confusion about the property type. It was, in fact, classified as a manufactured home. This disqualified it for a conventional loan, bumping the interest rate up almost 3 additional percent. The only way to make it work is if the seller wanted to drop the purchase price by $100k. Which they obviously didn't.
We're done with California. I know there are legends out there still killing it here in Sunny Cal. And one when the market finds a major correction, we'll jump in. In the meantime, we're narrowing in on some out of state investing.
Thanks again everyone for your input. Y'all are great!
@Brett D.. Hi Brett. I am sorry that your deal fell through. Good you found out during escrow. Good luck going forward. I am sure you will find something great.