How to start real estate investing in SC?

[Rene M.]

Hi all,

I want to start investing in real estate - Generally I am interested in a buy and hold strategy to get to the point that the property pays for itself to have passive income in a couple years... Thus I am looking for multiplex houses in good areas.
I have 50K cash and make 75K in my job. Credit score of 750 and no debt.

I found two houses which I like.

https://www.realtor.com/realestateandhomes-detail/121-Hester-St_Charleston_SC_29403_M65477-68321?ex=SC647059914

https://www.realtor.com/realestateandhomes-detail/78-San-Souci-St-Apt-A_Charleston_SC_29403_M55615-09407?ex=SC2268731789

But when I run the numbers I never get anywhere close to 12% Return on Cash flow...

I dont know if this is just unrealistic in the area I live and if real estate investment still makes sense?

Happy for any advise where and how to start...

Thanks!

[Jason Merchey]

Yes I agree with Bobby - the cash flow on a $150k duplex can get near to 12% ROI, though this is with financing and professional property management excluded (e.g., a cash purchase, self-managed). Buy a nice home in Mt. Pleasant for $700k and you'll rent it for say $3500 a month - nowhere near 12%. I think with stocks returning maybe 7-10%, anything in that zone is competitive. Remember, if it were quite easy to earn 11-15% a year on real estate, "everyone would be doing it." Three things currently keep folks in stocks rather than everyone piling into REI: the ease, the liquidity, and the perceived risk. By "ease" is meant the idea that it's got a whole different set of mechanics compared to analyzing P/E ratios in stocks, and some folks just don't know much about it, but more fundementally, the physical repairs and the interpersonal rigors of being a landlord. Flipping is a bit fashionable now due to HVTV shows and such, but at the moment it can be a bit challenging to find a good property (e.g., one that has 15-25% profit in it). These are a few of my thoughts. Good luck to you.