@Aaron McKenzie first of all: congratulations! as most people are not where you are today. So that is a plus already.
Your returns are as good as you think they are: considering the risk to investment you are making. At the end of the day: you have to set a standard and follow the standard to the 'T' !! to give you an example: I know an investor that buys for appreciation and on average and based on his pre-determined standard: loses up to $300 per property purchased. He also makes about $150k to $300k profit when he sells these properties (net profit). so it works for him, where most people think he is NUTS. He is very wealthy and can sustain that business plan. (and hence the key): he has a business plan. Do you? (sounds like you do, but are frustrated about the lack of inventory you are coming across).
so
instead of lowering your standards: why not create more opportunities that match your standards : i.e. $200 a month after all costs. - why not $300 a month... ? you decide
to give you a quick suggestion and eye-opener: you mention that the deals you get from the local whole sellers do not match what you want... well.. this is maybe bc they are taking a slice of the pie.
If you were direct to the seller - would the numbers change in your favor?
if they do: then, figure out how to be direct: 1) direct marketing 2) door knocking 3) creating the value (adding sq feet) : for this one: you may buy a 2 bed 1 bath that does not make sense: say that rents for $1200 breaking even: but you then add a master bed : and now the home is 3/2 and rents for $1700 : it went up in value and now you refinance it: get your investment out and still cycle the money in that way. Now the home makes sense and the ROI is what you need it to be.
The biggest mistake we have made is : lowering our standards: for cash flow, for the homes that we buy, for the people we work with, the work they do... etc
Create the standard and one that is uncompromising. The biggest trait successful investors have is DISCIPLINE.
lastly: i have a lot of cash investors: and they are purchasing cash only bc they can and they don't want to have a mortgage. But they still buy property: assuming a 20% down payment.
for example: industry standard is: 20% to 30% down payment right:
so if the home is 100k : they assume a 20k down payment
80k loan: and they want to get a ROI of at least 'X' (for them is usually 10% to 12% return on their money (on the 20k down payment and any renovations and closing costs expenses).
So when you ask: and wonder : is 200$ a month a good return?
set a standard: 10% return (even if you are not using your own money and re-cycling it): then
you will no longer guess:
this is important: bc it will be very easy to set the systems : this way your business becomes a money making machine:
In the future, once everything is systematize: someone will call you with a "good deal" and you will simply plug in all the numbers and in a few mins you will be able to figure out if the deal is a good deal for you or not.
Good luck!
