Wwon't investors pay more than $30,000 for $700 monthly rents?

[Account Closed]

Why?

Didn't want to hijack the other thread but it seems like this is the question investors should be asking themselves.  If you can consistently receive $700 rent on a $30,000 purchase then why doesn't the market bid these properties up IF they are really profitable?

[Justin R.]

Evelyn Roper and David Luetkemeyer I don't want to speak for Bob on the original question, but I think the question behind the original question is this:

There are really savvy, professional data-driven investor people with millions of dollars to put to work in real estate. They are under tremendous pressure to deliver stellar returns to their investors, both current income and absolute return ... And both high and low risk profiles. We've seen major moves over the past 6 years or so by private equity firms into the SFR rental market. There's a new "SFR Opportunity Fund" opened to high net worth investors every week that targets the purchase of $100k rentals for hold and refinance.

Why aren't these savvy investors or these well-informed funds going after the $30k homes that get $700 in monthly rent? Is there some gov regulation preventing it? Some geographic challenge preventing it? Lack of inventory? Inability to manage the assets? Not meeting their liquidity or marketing needs? Inability to scale with these properties? Are they doing it and we're just not noticing? Something else?

One would logically conclude that these smart investors - who certainly have access to the $30k-for-$700/m properties - have looked at the opportunity and judged other opportunities to be superior.

That said, clearly there's folks who are happy in this space. That's real. How does one reconcile these data points? For the folks happily investing in this space: Why isn't the market valuing these properties and their cash flow higher?