All Forum Posts by: Joe Hammel

Some markets simply don't cash flow. Heavily comes down to Price/Rent ratio (plus other things) but it depends on the demand for purchase and the demand for rent etc to get a favorable market. If looking for cash flow, research best price/rent ratios etc..

I'm biased...but Detroit has consistently ranked #1. 

I've bought in only the last 3 years here and net over $100k a year in cash flow from 16 properties. I can't buy more fast enough.

I'd buy 1 cash flowing investment for a purchase price around $100k

$20k Down

$15k closing costs and some repairs

$35k total

Still sitting on $15k savings.

Here is a picture of my portfolio in Metro Detroit...has multiple properties that fit this description and cash flow well.

 I'm a fan of cash flow in the early periods of building an investment portfolio. It's the foundation of a portfolio, and then once happy with your cash flow I like to start going for "better houses" and diversify location. If your property was in good location/good condition, i would say yes keep it...you have a low interest rates and i would assume it'll keep appreciating. However, if a property turns out to be a "lemon" and just keeps being more maintenance than it's worth...i do think selling is a good option (like getting rid of a car you no longer like). 

Just make sure it's actually not what you want....if you put another $10k into it would it then be perfect? some maintenance is normal...and i'm skeptical of a contractor coming in and blanket saying "it needs a ground up reno"... could help more with pics...

@Hamad Khan

If you’re in the fence at all…give yourself the green light to Retire!

You can still dabble, do some things you like…if you see a golden property, buy….if in 2 years you get bored, do a couple more things…but I think so many people feel like they “have” to work…and we don’t.

Congratulations on your success. Now go do all those fun things you’ve been wanting to do…and see how you feel in a couple years.

Looks like Detroit is a pretty popular answer here...at the risk of being redundant...I'll jump on the bandwagon..

In Detroit's defense, it is consistently ranked the #1 cash flow market in the country, so it's kinda inevitable.

I'm pretty biased towards Metro Detroit for obvious reasons lol.

HOWEVER, I do personally make over $100k/yr cash flow from 16 properties here. All of which, I’ve purchased only within the last 4 years.

So I do practice what we preach, and it really freaking works.

Metro Detroit has what 99% of Real Estate Investors want. Couple hundred bucks a door monthly cash flow, double digit ROI, and yes the prices appreciate and you build equity.

There are 2 types of people who dog on Detroit..

1. People who don't actually own property in Detroit

2. People who did it wrong and weren't able to execute.

If you do it right, it’s statistically the best market in the country for cash flow.

I cash flow $100k a year off 23 doors and have built a ton of equity in a short amount of time.

Purchase: $80k-$130k

Rent: $1100-$1500 (no rent control in MI)

1% rule: 1%-1.4% rule deals

ROI: 10-14%

Cash flow: $150-$300/door (after all expenses and budgeting for maint, capex, vacancy)

Appreciation: 3-10%+ (has been double digit for a decade)

Location: C+, B-

These numbers are based on the "sweet spot" in Metro Detroit. These are largely in the suburbs and some markets within the city. You can find higher ROI (on paper) here and probably in other cities…but the probability of actually collecting rent significantly decreases. Where these numbers are found, there is a very high rate of rent actually being paid.

We have over a dozen Fortune 500 companies just in Metro Detroit with huge Healthcare, Auto, and mortgage industry National footprints. Ford, Rocket mortgage, Beaumont hospitals and more. All complimented with Amazon fulfillment centers, google, and more tech manufacturing jobs.

The bad reputation of “Detroit” comes from OOS investors wanting sub $40,000, D class properties in poor condition, because they pencil out to 2-3% deals on paper. We don’t buy those.

We have found what works and repeat it as much as funds allow.

Detroit has the the highest rent to price ratio in the country…and we’ve found the perfect balance of price/location within the area.

Here is a picture of my portfolio...

Starting out with $100k is such a great position. Obviously I'm biased, but have you looked in to cash flowing markets? I make $100k a year off 16 properties in the Metro Detroit area..and with $100k you could buy 2-3 of these and get a nice start.

Here is an outline...

Purchase: $80k-$130k

Rent: $1100-$1500 (no rent control in MI)

1% rule: 1%-1.4% rule deals

ROI: 10-14%

Cash flow: $150-$300/door (after all expenses and budgeting for maint, capex, vacancy)

Appreciation: 3-10%+ (has been double digit for a decade)

Location: C+, B-

Tennesse has caught my attention as well...but when things aren't broken it's hard to change... following along to hear what other have to say...

Here is a pic of my portfolio if you want see examples..

 lol love it! Best of luck to you 

@Jason P McKay

Thanks!

Yes I can share with you the spreadsheet!

@Ke Nan Wang

Thanks Ke!

I’m on about every single wholesaler’s direct list in the area. I look in to them often, but the story is usually the same….”there’s a reason it’s being wholesaled and not on the market”, and it’s usually not a good one lol. Major issues, numbers just aren’t that good, hiding something and wholesalers aren’t bound by the code of ethics to disclose issues like agents are etc… We also have a competitive off market, market. So oftentimes the off market wholesale deals sell for retail price…but, as we know, with much fewer contingencies and protections.

Not knocking wholesaling…I just think it’s a hit or miss thing and for me and my market I don’t find it reliable enough to scale the way I’d like or worth the additional exposure/risk it brings.

Luckily, we have good deals on the mls here.

I appreciate the suggestion and I’ll keep watching the deals come through!!