Purchase Prices and Markets???

Question

Hello everyone, I have been on the site for several months looking at blogs and reading the forums. I am eager to jump into the investing world. I am reading several books and absorbing as much information as possible. I am living in South Florida but buy and hold investments aren't really worth it when I run the numbers. Between the property taxes and the purchase prices it doesn't make much sense. I have two questions for the investors out there that have been doing this for a while.

1. How do you find markets to invest in? I am most likely looking outside of Florida or in the Jacksonville area.

2. How much are the homes you typically purchase. If you have rehab costs could you tell me what your typical rehab costs are as well.

I am looking for an idea of what to look for purchase price wise and what markets I should be looking at (how to determine where to buy). I know there are markets where you can make money that have higher purchase prices but I am primarily looking for markets where the purchase price with rehab is around $100k. Thank you for any help you can give me in advance. I hope to expand my network of investors so I can build my portfolio and leave corporate america. :-)

Jeff

Kerry Baird · Answer

I have had investment properties in Arizona, Texas and Florida. The property taxes and high HOA of my Texas properties made them the duds of my portfolio, so I have sold them. But my Florida properties have had steady cash flow, appreciation and are in-demand as rentals.

What I look for: growing MSAs, so more in-migration than out. Good jobs in the blue collar to white collar segments. My rentals are all more than $100k now that they have appreciated.

There will be a lot of debate about tenant quality and cash flow at the lower margins of the housing stock. I don’t have any dodgy properties, because I want a higher quality of tenant. But they also don’t need to be brand new, with quartz and Wolf appliances, either.

Books have been written on choosing investments, whether single family or multi. What I did was find a Realtor who also was experienced with buying rentals for investment. She showed me which houses were in demand, in what areas, and in a price point that made sense for me. A regular, run of the mill Realtor won’t be able to do the same thing. Having experience with investments matters.

Jeffrey Collins · Answer

Thanks Danny. The meetings I have found lately have been more about selling than networking.

Danny Webber · Answer

Look for some local REI clubs and start networking there. Find a mentor!

Jeffrey Collins · Answer

@Kerry Baird thank you Kerry. I appreciate the response. I have been reading several bigger pocket books trying to get an idea about markets and how to find them. I have been looking in Florida as well but when I evaluate the properties and factor in the mortgage payment, property taxes and other expenses I am at break even or negative cash flow. I guess I need to continue looking for the right properties. I'm primarily looking at sfr.

Thanks Jeff

Purchase Prices and Markets???

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