Single-Family Long Term Rental Question

[Justi Kobilis]

Hi Everyone!

I am a new real estate investor on the west coast, looking to purchase a property in the Midwest. I have a spreadsheet for my analysis of the rates of return, including cash on cash and IRR, with all revenue and expense inputs. My dilemma is this---If I include major capex reserves such as for roof and all new HVAC, assuming replacement in 20 to 30 years, the rates of return go down to the point where I am not really excited about most of the deals out there. However, if I assume a 10 year holding period only and not account for these items, obviously assuming I buy a newly renovated property, the returns look better. But, I was hoping to be able to retire in 20 years with cash flow real estate! Maybe in 10 years just buy another renovated property or 1031 into multifamily? Does anyone have a good strategy for long term SFR rentals they could share? Thank you group!