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Updated 2 months ago, 10/01/2024

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Becca F.
  • Rental Property Investor
  • San Francisco Bay Area
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Questions for Ohio agents/investors and Class A, B, C in your markets

Becca F.
  • Rental Property Investor
  • San Francisco Bay Area
Posted

I'm an investor in the Bay Area and Indianapolis metro area. I've seen a lot of posts suggesting to beginning investors, many of them Californians that Ohio is a great market, particularly with Google, Intel, Honda, and Wells Fargo to Columbus. I've heard that Columbus is "the new Silicon Valley" of the the Midwest. I'm actually impressed by that although I don't plan to invest in the Midwest anymore. 

I bought a Class A (nice Indy suburban home with excellent schools) in 2013 and it's appreciated (doubled in value from 2013 to 2021) and I'm positive cash flow because of my low interest rate, 3.875%. I actually did a cash out refi during COVID so I would cash flow more if I had just done a rate and term refi. 

I bought Class C in Indy in 2023 (move in ready) and am losing money each money on what was supposed to cash flow on paper just barely $176 if no repairs were called in. Some of the comments that I've seen are 1% cash flow. Where are these properties and would they cash flow buying in 2024 (not 2020 or 2015)? 

What would be the price ranges of Class A, B and C properties in your markets of move in ready or something with light repairs (where a buyer could get a conventional loan, not a distressed property)? My opinion is that OOS investors, especially ones that are inexperienced shouldn't do BRRRRs. I've done a local renovation and I wouldn't do a BRRRR in Indy after a few attempted offers.

I'm not trying to be a jerk but truly trying to understand where this cash flow is coming from buying in 2023-2024, although I can understand with Columbus I could see it appreciating with those companies moving there. I appreciate the feedback, always trying to help out my California investor friends. 

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Travis Biziorek
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Travis Biziorek
  • Investor
  • Arroyo Grande, CA
Replied

Hey Becca, I can chime in as someone who does a lot in Detroit and works with a ton of investors from out-of-state that are buying there. We've done over 200 transactions this year alone (and 200 last year... yes, a huge uptick in demand!). We've been doing this since 2019.

I know Detroit isn't Ohio, but they're pretty similar.

We aren't seeing cash flow in A or B areas today. They are great as appreciation plays but that's not what most investors are looking for.

C/C+ is where you're going to cash flow... MAYBE in B- areas.

But it's really hard to find just plucking something "rent ready" from the MLS. Generally, if you're going the MLS route you're going to need to put a bit of work into it.

Where we're still seeing success is doing exactly what you said you do NOT want to do... Finding off-market deals and putting a fair bit of work into them.

Our typical deal today we're doing goes for a purchase price of around $50,000 - 60,000 and will require $20,000 - $30,000 in rehab.

These are general averages, of course.

Then you're seeing appraisals in the $90,000 - $120,000 range. 

Once you go above ~$120,000 in Detroit you're going to have a hard time cash flowing, although rents have moved a bit higher and we still underwrite our deals pretty conservatively on that end.

All that said, it has gotten more difficult to find deals that work. We still have a ton of demand from OOS folks but we're having a hard time filling it with quality deals. 

The takeaway here probably boils down to the fact that there aren't a lot of markets that cash flow today with yesterday's strategy. 

A lot of folks were plucking stuff off the MLS, putting a tenant in place, and cash flowing. That worked well when rates were 3.5% but that "strategy" no longer exists. Prices haven't fallen, and rents haven't moved up enough.

Investors either need to work harder, be more creative, accept negative cash flow, or sit on the sidelines. 

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Samuel Diouf
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Samuel Diouf
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Replied

Class A in Columbus is going to be very broad, with properties starting from $500k+ into the millions. A class property is great but doesn't make sense if you're looking to scale efficiently. 

Class B real estate investments are great. I really like the duplexes in these areas of Columbus because a lot of people are trying to house-hack these deals. Prices will range from around $300k-$400k. 

C class is where a lot of OOS investors are going because you'll still get the appreciation from the growing city, but your properties will cash-flow the strongest because of the lower prices. Duplexes are ranging from $180k-$280k 

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Nicholas L.
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Nicholas L.
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Replied

@Samuel Diouf

I think @Becca F. is making the point not that there aren't deals in Ohio - there are deals everywhere - but that you're not going to "cash flow" just by buying a random property.  for example, I don't know the Columbus market since I invest in Pittsburgh, but I doubt that a random duplex in the range you threw out is going to 'cash flow.'  interest rates just don't support it right now.  and if you buy something that's occupied and needs work, again, it might be a great opportunity.  but it's not a mailbox money / cash flow situation.

  • Nicholas L.
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    Samuel Diouf
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    Samuel Diouf
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    Replied
    Quote from @Nicholas L.:

    @Samuel Diouf

    I think @Becca F. is making the point not that there aren't deals in Ohio - there are deals everywhere - but that you're not going to "cash flow" just by buying a random property.  for example, I don't know the Columbus market since I invest in Pittsburgh, but I doubt that a random duplex in the range you threw out is going to 'cash flow.'  interest rates just don't support it right now.  and if you buy something that's occupied and needs work, again, it might be a great opportunity.  but it's not a mailbox money / cash flow situation.


     A lot of the duplexes are cash-flowing day 1, just not at crazy high caps. But Columbus isn't a cash-flow market and the chances of you buying said property and seeing it appreciate are pretty high right now. 

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    Becca F.
    • Rental Property Investor
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    Becca F.
    • Rental Property Investor
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    @Samuel Diouf

    I appreciate your feedback. Wow Class A in Columbus seems to be much higher priced than Indianapolis if it's starting at $500k to the millions. You can find Class A in a nice Indy suburb for $280k to $550k. Some people with deep pockets are buying for appreciation and the negative cash flow doesn't bother them. Someone buying $1million home in Indy is buying it for a primary residence

    On the Class C, are clients buying 1950s or newer? What's the crime like in those areas? I won't be buying anymore 1920 renovated homes. I feel like a 100 year old home is going to have a lot of problems even it's renovated - if I hold it long enough it'll appreciate but will my appreciation outweigh all my repairs and Capex. I don't think my kids will want to inherit this type of property.

    What are ways your clients are mitigating the risks of losing money in their deal analysis? What red flags would cause them to pass on a deal? Are they mostly doing LTRs or some doing MTRs/STRs? I know a lot of CA investors doing MTR/STRs to cash flow in-state and OOS but it's a lot more work, not mailbox money.

    I hear stories of OOS investors losing money in the Midwest, the worst being a CA investor buying 3 apartment Class C complexes in Missouri who finally sold it 3 years year with all the repairs and tenant issues after changing PMs which didn't help. My story isn't that bad compared to hers but she obviously has way more capital than most new investors. I cringe when I hear Class C now since I fell onto the losing side of the Class C gamble (hopefully it'll stabilize in 2 to 3 years). 

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    Drew Sygit
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    Drew Sygit
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    Replied

    @Becca F. I'm copying my response from a previous post:

    1) Investors were chasing Class A rentals from 2012-2020, before their values exceeded their pre Great Recession highs and they wouldn't cashflow at purchase anymore.

    2) So, investors started chasing Class B rentals in 2020-2022 because of #1 above. Those stilled cashflowed mostly due to insanely low interest rates.

    3) Investors started chasing Class C rentals in 2022 when Class B rental prices AND higher mortgage rates didn't allow cashflow at purchase.

    4) Investors are now chasing Section 8 tenants as the cure-all for Class C tenant performance issues, so their Class C properties ACTUALLY cashflow. Because they found out the hard way that while Class C rentals look good on paper, they really don't perform as well as Class A or B, due to tenant nonperformance & damages.

    My point is, you are unlikely to find a shortcut around the challenges listed above. 

    In Metro Detroit, and I'd think in most Midwest cities, investors really have two options:

    1) Buy Class B and either put more down to cashflow at closing or deal with 1-3 years of negative cashflow until rents increase. Appreciation MAY offset the cashflow loss.
    ---You can try to increase your chances of cashflow by buying a beatup property and BRRRing it.

    2) Buy Class C cautiously. Use a 20% vacancy/tenant nonperformance factor in your analysis. Don't trust what ANYONE tells you about a market without solid data to back it up - this includes claims about how many transactions they've done or a single example (that's often from several years ago). 
    ---You can also buy a beatup property in this Class and BRRR it. At least you'll then know what work was actually done!

    Recommend you start researching what investors did prior to the Great Crash of 2008. I was there and we had to work HARD to find deals that made sense. We didn't buy much from the MLS and if we did, it was either a "handyman special" or it had been on the market 180+ days with a motivated seller willing to take less than market value.

    This will be the "new normal" going forward and a lot of newer investors will drop out of the acquisition market and just hold what they have.

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    Linda Labbe
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    Linda Labbe
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    HI all we invest in Detroit and Toledo and cash flow in both  duplexes are much easier to cash flow in and in both cities you have to watch your blocks.. Moe then willing to discuss what we are doing with anyone who wants to chat

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    Gladimir Lobo
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    Gladimir Lobo
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    Replied
    Quote from @Jimmy Lieu:
    Jimmy, you've hit the mark. Excellent advice. I had to strike out 'friendly' from the equation. The term 'Investor Friendly' can be misleading for many. What they really need is an Investor-Agent, someone who is both an investor and an agent. Investors should be wary of the marketing ploy "Investor Friendly Agent/Realtor." A realtor's role is to assist in your buying or selling process. However, with less than 10% of realtors actively investing, it's crucial to vet them thoroughly. Happy to connect.

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    Becca F.
    • Rental Property Investor
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    Becca F.
    • Rental Property Investor
    • San Francisco Bay Area
    Replied
    Quote from @Jimmy Lieu:


    If you're looking for positive cash flow, you should be looking into the B-/C type neighborhoods because this is where you'll find a lot more buy and hold, BRRRR, and positive cash flow opportunities.

    I appreciate your comments. Could you please give me a specific example of 1% rule, maybe a recent deal your client did in 2023 or 2024  (without giving out identifying details of the client, if allowed)? Is this using a 20% down, conventional or DSCR loan, although I would think a first time investor would use a conventional loan.

    If someone is paying cash or putting down 50%, it would "cash flow" better - there are investors in the Bay Area that have a lot of capital, not usually a first time investor that pay cash. I run my numbers using 20% down or the most 25% down. 

    I'm pretty transparent. Here's my Indianapolis Class C deal in March 2023. This in a neighborhood that is slowly appreciating, some renovated homes mixed in with older homes, but is street by street:

    Purchase price: $130,0000
    1% rule: meets about 0.88% 
    Down payment 20% and closing costs: $29,493
    Rate: 6.99% conventional 30 year
    Monthly payment PITI: $1009 (was $859 until property taxes increased recently) 
    Current rent $1200 (increased from $1150)
    Property management fee 10%: $120 (was $115) 
    Net cash flow (if no repairs called in): $71 (was $176)

    Net rental income most months: $170 (first month rent), $935, $922, $1035 (full month rent minus PM fee) $567, $760, $307, $963, $1035 (full month ), $535, $925, $1035 (full month but now property taxes increased), $585. I'm negative most months and rent doesn't cover my monthly payment. What PMs have told me is that it takes a year or two to stabilize. 

    Repair costs in first 1 month of owning (this is renovated house done by seller, not me. I flew there and walked the house, looked pretty turnkey rental grade):
    $1029 GFCI outlets, downspouts and guards, drywall, paint, bathroom vent
    $4615 (new AC unit since unit was stolen before tenant moved in, didn't file insurance claim because didn't want my premium to go up)
    $600 (water line, gas line, P trap)
    $60 lawn mowing
    $112  thermostat repair

    My opinion is that Class C is better for local investors who are on site and know how to do repairs and self manage. I think it's a gamble for someone 2000 miles away - could do well or badly. 



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    Jimmy Lieu
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    Jimmy Lieu
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    Replied
    Quote from @Becca F.:
    Quote from @Jimmy Lieu:


    If you're looking for positive cash flow, you should be looking into the B-/C type neighborhoods because this is where you'll find a lot more buy and hold, BRRRR, and positive cash flow opportunities.

    I appreciate your comments. Could you please give me a specific example of 1% rule, maybe a recent deal your client did in 2023 or 2024  (without giving out identifying details of the client, if allowed)? Is this using a 20% down, conventional or DSCR loan, although I would think a first time investor would use a conventional loan.

    If someone is paying cash or putting down 50%, it would "cash flow" better - there are investors in the Bay Area that have a lot of capital, not usually a first time investor that pay cash. I run my numbers using 20% down or the most 25% down. 

    I'm pretty transparent. Here's my Indianapolis Class C deal in March 2023. This in a neighborhood that is slowly appreciating, some renovated homes mixed in with older homes, but is street by street:

    Purchase price: $130,0000
    1% rule: meets about 0.88% 
    Down payment 20% and closing costs: $29,493
    Rate: 6.99% conventional 30 year
    Monthly payment PITI: $1009 (was $859 until property taxes increased recently) 
    Current rent $1200 (increased from $1150)
    Property management fee 10%: $120 (was $115) 
    Net cash flow (if no repairs called in): $71 (was $176)

    Net rental income most months: $170 (first month rent), $935, $922, $1035 (full month rent minus PM fee) $567, $760, $307, $963, $1035 (full month ), $535, $925, $1035 (full month but now property taxes increased), $585. I'm negative most months and rent doesn't cover my monthly payment. What PMs have told me is that it takes a year or two to stabilize. 

    Repair costs in first 1 month of owning (this is renovated house done by seller, not me. I flew there and walked the house, looked pretty turnkey rental grade):
    $1029 GFCI outlets, downspouts and guards, drywall, paint, bathroom vent
    $4615 (new AC unit since unit was stolen before tenant moved in, didn't file insurance claim because didn't want my premium to go up)
    $600 (water line, gas line, P trap)
    $60 lawn mowing
    $112  thermostat repair

    My opinion is that Class C is better for local investors who are on site and know how to do repairs and self manage. I think it's a gamble for someone 2000 miles away - could do well or badly. 



    Have tons of examples of deals that hit the 1% rule and positive cash flow. Happy to connect and to answer any questions you may have.

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    Becca F.
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    Becca F.
    • Rental Property Investor
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    Replied
    Quote from @Jimmy Lieu:

    Have tons of examples of deals that hit the 1% rule and positive cash flow. Happy to connect and to answer any questions you may have.

    Hi Jimmy, are you able to post a specific example on here of a property that hits the 1% rule and positive cash flow buying in 2023 and 2024 (not in 2021 or previous years) with an LTR? I'm not sure of what the rules are regarding agent-client confidentiality but without naming any names or addresses, for example:

    SFH#1 or Duplex #1, if this is Class A, B, or C area, purchase price, down payment, loan terms, monthly payment PITI, gross rent, property management fees, other repair or cap ex costs your client went through and the net rental income for this investor

    If this isn't an LTR but an MTR or STR, now we're adding utilities, WiFi, furnishing the place, higher PM fees. If this is an issue posting this on a public forum, I'll DM you. Thanks!

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    Scott Trench
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    @Jimmy Lieu - @Becca F. asked you a question and is now challenging me in another thread. She is essentially implying that these 1% rule properties have something very wrong with them or don't exist. 

    Can you please provide a specific example - there is no rule against this, and you are certainly allowed to. This would end speculation and bring you a lot of credibility.

    Please post a deal that meets the criteria you claim you have "tons of examples" of. 

    Thanks in advance! 

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    Travis Timmons
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    Travis Timmons
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    Replied

    @Jimmy Lieu @Scott Trench @Becca F.

    What an agent pitches a deal at or how they tout it at closing vs. end of year actuals are usually two very different numbers. That spread is likely exaggerated in out of state, class C properties. 

    The more you make it seem like there is easy money, the less credibility you have. I get that you are trying to garner business. I worked in sales for 18 years. It's a grind. You're going to get a lot more business by being a credible source of information that says out loud that it's a "what can you do that is really hard?" market right now. 

    The easy money is gone. And please stop copying and pasting the same spammy message on these forums. 

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    Becca F.
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    Becca F.
    • Rental Property Investor
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    @Scott Trench

    Thank you. I've communicated with other agents in Nevada that provided me data with median rents, cap rates, how much I would need to put down to get it to "cash flow/break even" with higher interest rates, etc. One of the agents @Eric Fernwood has posted several times on BP with charts and graphs comparing Las Vegas and a few other cities, appreciation over the years, etc. This is a lot more helpful to me when making investing decisions than platitudes of "positive cash flow" with no data to back it up. 

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    Becca F.
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    Becca F.
    • Rental Property Investor
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    Replied

    Interesting how this thread suddenly went silent for all the times the Ohio agents comment on posts. 

    Thanks @Samuel Diouf for typing out a response that's not a mass copy and paste and gives a starting point on prices. Are a lot of investors doing MTR or STR to cash flow or are most of your clients doing LTR?

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    Samuel Diouf
    Agent
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    Samuel Diouf
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    Replied
    Quote from @Becca F.:

    @Samuel Diouf

    I appreciate your feedback. Wow Class A in Columbus seems to be much higher priced than Indianapolis if it's starting at $500k to the millions. You can find Class A in a nice Indy suburb for $280k to $550k. Some people with deep pockets are buying for appreciation and the negative cash flow doesn't bother them. Someone buying $1million home in Indy is buying it for a primary residence

    On the Class C, are clients buying 1950s or newer? What's the crime like in those areas? I won't be buying anymore 1920 renovated homes. I feel like a 100 year old home is going to have a lot of problems even it's renovated - if I hold it long enough it'll appreciate but will my appreciation outweigh all my repairs and Capex. I don't think my kids will want to inherit this type of property.

    What are ways your clients are mitigating the risks of losing money in their deal analysis? What red flags would cause them to pass on a deal? Are they mostly doing LTRs or some doing MTRs/STRs? I know a lot of CA investors doing MTR/STRs to cash flow in-state and OOS but it's a lot more work, not mailbox money.

    I hear stories of OOS investors losing money in the Midwest, the worst being a CA investor buying 3 apartment Class C complexes in Missouri who finally sold it 3 years year with all the repairs and tenant issues after changing PMs which didn't help. My story isn't that bad compared to hers but she obviously has way more capital than most new investors. I cringe when I hear Class C now since I fell onto the losing side of the Class C gamble (hopefully it'll stabilize in 2 to 3 years). 

    Most of my clients are doing LTR. A lot of stuff that we've locked up has been cash-flow positive day one. 

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    Reafco - Samuel Diouf
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    Remington Lyman
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    Remington Lyman
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    • Real Estate Agent
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    Replied
    Quote from @Scott Trench:

    @Jimmy Lieu - @Becca F. asked you a question and is now challenging me in another thread. She is essentially implying that these 1% rule properties have something very wrong with them or don't exist. 

    Can you please provide a specific example - there is no rule against this, and you are certainly allowed to. This would end speculation and bring you a lot of credibility.

    Please post a deal that meets the criteria you claim you have "tons of examples" of. 

    Thanks in advance! 

    The issue at hand is the difference between following the 1% rule and achieving positive cash flow in real estate investment. I have observed clients who have purchased properties based on the 1% rule but have struggled to stabilize them. They tend to rely solely on property managers and fail to effectively oversee the management of the property. On the other hand, I have seen out-of-state investors purchase properties that do not meet the 1% rule, opt for self-management, engage in sweat equity, and still achieve great cash flow.

    For a specific example, any listing from the market could be used. I'm also open to discussing the properties I have purchased, analyzing which deals have been successful and which ones have not.

    In my experience, out-of-state investors who buy single-family homes in the suburbs usually see better returns. However, when I talk to new clients, they are not interested in these properties. They prefer to purchase a duplex in a C location because they have read a book about the 1% rule and/or the BRRRR rule.

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    James Hamling
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    James Hamling
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    Replied
    Quote from @Becca F.:
    Quote from @Jimmy Lieu:

    Have tons of examples of deals that hit the 1% rule and positive cash flow. Happy to connect and to answer any questions you may have.

    Hi Jimmy, are you able to post a specific example on here of a property that hits the 1% rule and positive cash flow buying in 2023 and 2024 (not in 2021 or previous years) with an LTR?.......

    Becca, maybe Jimmy is just needs someone to show him how it's done........ 

    St Cloud MN Duplex, list/purchase price $259,900
    market rents $1,610 per unit BUT yes, if one really wanted to sec8 income standards are $1,957 per unit so one could go that direction if wanted be. I used the lower of rent amounts for analysis. 
    https://www.biggerpockets.com/analysis/rentals/ee5f6928-93ce... is link to the BP Calculation on it. 

    Here is the rental analysis data on how we came to $1,610 per unit and, when manually comp we find that's dang accurate for 4br. 

    And last but not least, the sale listing. 

     And for any who question how legit my info is on sec8 Payment Standards, here ya-go, the current 2024 rates in this area. 

    So ya-see Jimmy, that's how we have a FACT-BASED conversation on "I can land 1%+ deals no problem"........ 

    • James Hamling
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    Dan H.
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    Dan H.
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    Quote from @James Hamling:
    Quote from @Becca F.:
    Quote from @Jimmy Lieu:

    Have tons of examples of deals that hit the 1% rule and positive cash flow. Happy to connect and to answer any questions you may have.

    Hi Jimmy, are you able to post a specific example on here of a property that hits the 1% rule and positive cash flow buying in 2023 and 2024 (not in 2021 or previous years) with an LTR?.......

    Becca, maybe Jimmy is just needs someone to show him how it's done........

    St Cloud MN Duplex, list/purchase price $259,900
    market rents $1,610 per unit BUT yes, if one really wanted to sec8 income standards are $1,957 per unit so one could go that direction if wanted be. I used the lower of rent amounts for analysis.
    https://www.biggerpockets.com/analysis/rentals/ee5f6928-93ce... is link to the BP Calculation on it.

    Here is the rental analysis data on how we came to $1,610 per unit and, when manually comp we find that's dang accurate for 4br.

    And last but not least, the sale listing.

    And for any who question how legit my info is on sec8 Payment Standards, here ya-go, the current 2024 rates in this area.

    So ya-see Jimmy, that's how we have a FACT-BASED conversation on "I can land 1%+ deals no problem"........

    I applaud you for putting it out there but 1) maintenance/cap ex is far too low for a duplex 2) no PM. 3) vacancy at 1% will be challenging if achieving near market rent.

    Even when I self manage I include pm because it is work and I do not work for free. I use standard market PM rates in my underwriting, but I also would not work for those rates but it is fair compensation for the work.

    I typically use vacancy of 5% not because I have ever had a unit that had that high vacancy but I do not have a no payment category and I want the underwriting to be conservative

    on the opposite, your rate is a bit high and your appreciation rate and rent growth are modest.


    overall, seems like a decent attempt at an analysis.  Also appreciate your doing it to encourage others.  

  • Dan H.
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    James Hamling
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    James Hamling
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    Quote from @Dan H.:
    Quote from @James Hamling:
    Quote from @Becca F.:
    Quote from @Jimmy Lieu:

    Have tons of examples of deals that hit the 1% rule and positive cash flow. Happy to connect and to answer any questions you may have.

    Hi Jimmy, are you able to post a specific example on here of a property that hits the 1% rule and positive cash flow buying in 2023 and 2024 (not in 2021 or previous years) with an LTR?.......

    Becca, maybe Jimmy is just needs someone to show him how it's done........

    St Cloud MN Duplex, list/purchase price $259,900
    market rents $1,610 per unit BUT yes, if one really wanted to sec8 income standards are $1,957 per unit so one could go that direction if wanted be. I used the lower of rent amounts for analysis.
    https://www.biggerpockets.com/analysis/rentals/ee5f6928-93ce... is link to the BP Calculation on it.

    Here is the rental analysis data on how we came to $1,610 per unit and, when manually comp we find that's dang accurate for 4br.

    And last but not least, the sale listing.

    And for any who question how legit my info is on sec8 Payment Standards, here ya-go, the current 2024 rates in this area.

    So ya-see Jimmy, that's how we have a FACT-BASED conversation on "I can land 1%+ deals no problem"........

    I applaud you for putting it out there but 1) maintenance/cap ex is far too low for a duplex 2) no PM. 3) vacancy at 1% will be challenging if achieving near market rent.

    Even when I self manage I include pm because it is work and I do not work for free. I use standard market PM rates in my underwriting, but I also would not work for those rates but it is fair compensation for the work.

    I typically use vacancy of 5% not because I have ever had a unit that had that high vacancy but I do not have a no payment category and I want the underwriting to be conservative

    on the opposite, your rate is a bit high and your appreciation rate and rent growth are modest.


    overall, seems like a decent attempt at an analysis.  Also appreciate your doing it to encourage others.  


    1) Totally understand where your coming from. This is specific to this, I have the detailed 411 on this, including full background on seller, why selling, how things have gone, maintenance history and recent updates/upgrades such as the newer roof, HVAC etc etc etc... 

    BUT.... but, but, but, also how a person manages will impact this. I personally HATE maintenance, so i find jazzy ways to "trade" that with tenant. Notice I say maintenance and not cap-x. And I find many tenants in this class level really connect with it if there an ideal tenant. They can get a better deal for there better care etc etc.. I have written about it before in long past. 

    2) Yes, no PM and no tenant placement fee consideration. I do this as there is so many different ways persons choose to do such, so many different fee structures, so I keep it off and I tell clients UP FRONT to keep that in mind and add what is specific to there situation.    I than let them know my top choices for PM/TP provider in that specific market, not just my own but whoever I see as current best, and what there rates are.     And yes, 1,000%, if doing self-managing you should not work for free and need to be allocating some rate for self. 

    3) That is actually accurate in this instance. As mentioned, one could run it sec8, for more $, and the sec8 waiting list has been full for 7+ years now. Affordable housing is RED-hot at this time, especially if it's decent 3br+ housing sub $2k.    Leasing for sub sec8 is a "deal". And for an OOS, I always advise to keep things simple at start, don't get greedy, go for quality and consistency, then work on maximizing monetization later. 

    • James Hamling
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