Constant negative ROI's on prospects

[Steven Whitehead]

Hey everyone,

So I've been scouting around my area looking for good deals on potential rental properties, however the monthly ROI calculation I've been running keeps coming back negative for almost every property (except for one for-closure I've found). I've gone over the calculation again and again and it's solid, even under ideal turnkey circumstances with unrealistic mortgage/insurance rates, the ROI's are negative.

So my question is do you rental investors bid under the asking price? I know the (price after renos*.7)-reno costs=bid equation. Do you pitch that number and hope for the best? If so, what if there are other bids on the property that are already above that number?

Or is my market just too hot at the moment?..

[Ali Boone]

I'd say it's your market. How far into the negative are your calculations? If they are fairly negative, not sure offering less than asking will help you much. As far as what I know about your area, I wouldn't expect to find cash flow. I'm in Los Angeles and same thing here. I've always bought non-locally to make it work.