Broker Challenge: Find me a $1M+ House - 7-8% Rental Yield

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Broker Challenge: Find me a $1M+ House - 7-8% Rental Yield

Account Closed
Investor · Miami, FL · Member since 2023 · 120 posts · 46 votes

Hey everyone,

Looking to buy LTR in the US. Cash in hand and also pre-approved if I go financing route. 

Please keep in mind, anything that is sent to me will go through extensive checks via different resources I have, so please let's be practical and realistic about everything. 

Let me know if the below exists today:

Dos

Must be ~A neighborhood, and I hope to be one of the less expensive houses in the neighborhood

Open to renovation - Rather have turn key

Minimum 1M, ideally 1.25-1.5M

Must be off market deal under inflated market

Do nots

No STR / AirBNB based asset - Don't tell me that the asset will make 7% if I AirBNB it

Not in vacation markets!

Not in a market that has appreciated 50% in the last 24 months

Not Multi-Family or Condo

Please do not BS me with comps of different neighborhoods and hypothetical rental yield that based on what the mansion on the beach rented for 2 years ago or what it has been doing on AirBNB.

Only things that can easily be compd to long term rentals

Ready to pull the trigger on a deal, please don't waste my time and I promise I won't waste yours

Below are examples of price to rent I am looking for:

Home price - Rental price

1M - $7,000 / month

1.1M - $8,000 / month

1.2M - $9,000 / month

1.35M - $10,000 / month

1.45M - $10,500 / month

1.55M - $11,000 / month

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Carlos Ptriawan
Member since 2019 · 7k+ posts · 4k+ votes
2y
Quote from @Account Closed:

Hey everyone,

Looking to buy LTR in the US. Cash in hand and also pre-approved if I go financing route. 

Please keep in mind, anything that is sent to me will go through extensive checks via different resources I have, so please let's be practical and realistic about everything. 

Try to understand cap rate.
Your understanding of market is deeply flawed (or skewed).

There's distribution of rent that at certain rent price (les say 5K rent) it is making more sense for the renter to buy their own house. The rent distribution are not linear progressive. 

Once the rent is above 4k, this is the situation where renter is very qualified to get mortgage and quite well versed in their financial situation that they may just choose to rent for a house of 4k or less rather than spending 7k a month for rental; or get mortgage and paying only 4-5K per month for one mil house.

7Reply
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  • Account Closed
    OP
    Investor · Miami, FL · Member since 2023 · 120 posts · 46 votes
    2y

    Kind of sad, when I post a "dumb investor" post about it I'm flooded with deals of things I easily ruled out as inflated numbers that don't check out when I do my own comps, but when I post ahead that I will be doing my due diligence all the brokers are quiet. Ha!

    0Reply
  • Bob S.
    Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes
    2y
    Quote from @Account Closed:

    Kind of sad, when I post a "dumb investor" post about it I'm flooded with deals of things I easily ruled out as inflated numbers that don't check out when I do my own comps, but when I post ahead that I will be doing my due diligence all the brokers are quiet. Ha!

     Very difficult market to find a tenant for a 7, 8, 9 k lease. Why not just buy 10 or so with 10k ish net income, much easier.

    3Reply
  • Bob S.
    Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes
    2y

    BTW unless you have an American address and bank acct, you are not getting a loan, so you have to be cash 

    1Reply
  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    2y

    Sorry youll need to maybe look to a different country to find what you are looking for. Cities with single family homes in these proce ranges will have substantially lower yields than what you're looking for.

    [email protected]301-893-4635Podcast Guest on Show #192
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    5Reply
  • Bill B.
    Investor · Las Vegas, NV · Member since 2013 · 8k+ posts · 10k+ votes
    2y

    The yield goes down as the price goes up, maybe everywhere in the world, definitely in America. Imagine if it didn’t. Why would anyone have 10 x cheaper homes instead?

    Ps. You can buy yourself a job with a STR destination property. A friend went to a wedding where the bridal party rented a $3M mansion for $11,000 for 5 days.

    1Reply
  • Account Closed
    OP
    Investor · Miami, FL · Member since 2023 · 120 posts · 46 votes
    2y
    Quote from @Bob S.:

    BTW unless you have an American address and bank acct, you are not getting a loan, so you have to be cash 


    Please read my post, it says "Cash in hand and also pre-approved if I go financing route"

    0Reply
  • Account Closed
    OP
    Investor · Miami, FL · Member since 2023 · 120 posts · 46 votes
    2y
    Quote from @Russell Brazil:

    Sorry youll need to maybe look to a different country to find what you are looking for. Cities with single family homes in these proce ranges will have substantially lower yields than what you're looking for.


     So there is no way to be cash flow positive in the US on 1M+ homes today? Is that what you're saying?

    0Reply
  • Account Closed
    OP
    Investor · Miami, FL · Member since 2023 · 120 posts · 46 votes
    2y
    Quote from @Bob S.:
    Quote from @Account Closed:

    Kind of sad, when I post a "dumb investor" post about it I'm flooded with deals of things I easily ruled out as inflated numbers that don't check out when I do my own comps, but when I post ahead that I will be doing my due diligence all the brokers are quiet. Ha!

     Very difficult market to find a tenant for a 7, 8, 9 k lease. Why not just buy 10 or so with 10k ish net income, much easier.


     Buying 10 houses is easier? No thanks. 

    1Reply
  • Bob S.
    Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes
    2y
    Quote from @Account Closed:
    Quote from @Bob S.:
    Quote from @Account Closed:

    Kind of sad, when I post a "dumb investor" post about it I'm flooded with deals of things I easily ruled out as inflated numbers that don't check out when I do my own comps, but when I post ahead that I will be doing my due diligence all the brokers are quiet. Ha!

     Very difficult market to find a tenant for a 7, 8, 9 k lease. Why not just buy 10 or so with 10k ish net income, much easier.


     Buying 10 houses is easier? No thanks. 

    Much easier, all you need to do is connect with those that provide props, easy.  I picked up 7 just this past week, ALL with 15% NET caps. Finding a tenant for 10k a month, VERY difficult. Also buying a 1 mill dollar property that WILL be overpriced, not a good move. Hey but what do I know, I have only done about 500 deals and owned 100s, . I am not just posting nonsense, ALL from extensive experience. 
    All the best 

    5Reply
  • Bob S.
    Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes
    2y
    Quote from @Account Closed:
    Quote from @Bob S.:

    BTW unless you have an American address and bank acct, you are not getting a loan, so you have to be cash 


    Please read my post, it says "Cash in hand and also pre-approved if I go financing route"


     Great, cash is the best way to get the best deals. All 500 or so of my transactions have been cash,

    All the best 

    0Reply
  • Account Closed
    OP
    Investor · Miami, FL · Member since 2023 · 120 posts · 46 votes
    2y
    Quote from @Bob S.:
    Quote from @Account Closed:
    Quote from @Bob S.:
    Quote from @Account Closed:

    Kind of sad, when I post a "dumb investor" post about it I'm flooded with deals of things I easily ruled out as inflated numbers that don't check out when I do my own comps, but when I post ahead that I will be doing my due diligence all the brokers are quiet. Ha!

     Very difficult market to find a tenant for a 7, 8, 9 k lease. Why not just buy 10 or so with 10k ish net income, much easier.


     Buying 10 houses is easier? No thanks. 

    Much easier, all you need to do is connect with those that provide props, easy.  I picked up 7 just this past week, ALL with 15% NET caps. Finding a tenant for 10k a month, VERY difficult. Also buying a 1 mill dollar property that WILL be overpriced, not a good move. Hey but what do I know, I have only done about 500 deals and owned 100s, . I am not just posting nonsense, ALL from extensive experience. 
    All the best 


     I feel like the more high end will be less exposed to the upcoming crash. 

    1Reply
  • Bob S.
    Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes
    2y
    Quote from @Account Closed:
    Quote from @Bob S.:
    Quote from @Account Closed:
    Quote from @Bob S.:
    Quote from @Account Closed:

    Kind of sad, when I post a "dumb investor" post about it I'm flooded with deals of things I easily ruled out as inflated numbers that don't check out when I do my own comps, but when I post ahead that I will be doing my due diligence all the brokers are quiet. Ha!

     Very difficult market to find a tenant for a 7, 8, 9 k lease. Why not just buy 10 or so with 10k ish net income, much easier.


     Buying 10 houses is easier? No thanks. 

    Much easier, all you need to do is connect with those that provide props, easy.  I picked up 7 just this past week, ALL with 15% NET caps. Finding a tenant for 10k a month, VERY difficult. Also buying a 1 mill dollar property that WILL be overpriced, not a good move. Hey but what do I know, I have only done about 500 deals and owned 100s, . I am not just posting nonsense, ALL from extensive experience. 
    All the best 


     I feel like the more high end will be less exposed to the upcoming crash. 


     Well sorry but that is 100% incorrect, you can't get hurt jumping out of a basement window :)

    I picked up 7, all about 80k each, all with values of about 115- 125k, all with 1100- 1400 in rent, MUCH safer than paying a mill for a house that two years ago was 600k,,,,,,,,,,,

    AGAIN, I am not just writing nonsense. I would NEVER buy a mill house now. Not a chance in hell. Homes in my area were 800k, two years ago, now selling for 3mill, tell me the people paying 3 mill are not going to get crushed,,,,,, they will. 

    Good luck 

    4Reply
  • Account Closed
    OP
    Investor · Miami, FL · Member since 2023 · 120 posts · 46 votes
    2y
    Quote from @Bob S.:
    Quote from @Account Closed:
    Quote from @Bob S.:
    Quote from @Account Closed:
    Quote from @Bob S.:
    Quote from @Account Closed:

    Kind of sad, when I post a "dumb investor" post about it I'm flooded with deals of things I easily ruled out as inflated numbers that don't check out when I do my own comps, but when I post ahead that I will be doing my due diligence all the brokers are quiet. Ha!

     Very difficult market to find a tenant for a 7, 8, 9 k lease. Why not just buy 10 or so with 10k ish net income, much easier.


     Buying 10 houses is easier? No thanks. 

    Much easier, all you need to do is connect with those that provide props, easy.  I picked up 7 just this past week, ALL with 15% NET caps. Finding a tenant for 10k a month, VERY difficult. Also buying a 1 mill dollar property that WILL be overpriced, not a good move. Hey but what do I know, I have only done about 500 deals and owned 100s, . I am not just posting nonsense, ALL from extensive experience. 
    All the best 


     I feel like the more high end will be less exposed to the upcoming crash. 


     Well sorry but that is 100% incorrect, you can't get hurt jumping out of a basement window :)

    I picked up 7, all about 80k each, all with values of about 115- 125k, all with 1100- 1400 in rent, MUCH safer than paying a mill for a house that two years ago was 600k,,,,,,,,,,,

    AGAIN, I am not just writing nonsense. I would NEVER buy a mill house now. Not a chance in hell. Homes in my area were 800k, two years ago, now selling for 3mill, tell me the people paying 3 mill are not going to get crushed,,,,,, they will. 

    Good luck 


     If you're buying things 30% under current market value you will win every time, 100K or 100M. 

    Not interested in this sort of products though. 

    0Reply
  • Bob S.
    Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes
    2y

    You are not buying $1 million house for 700,000. Then good luck finding a tenant for 10,000 bucks a month that is going to be a bigger challenge. Good luck

    5Reply
  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    2y
    Quote from @Account Closed:
    Quote from @Russell Brazil:

    Sorry youll need to maybe look to a different country to find what you are looking for. Cities with single family homes in these proce ranges will have substantially lower yields than what you're looking for.


     So there is no way to be cash flow positive in the US on 1M+ homes today? Is that what you're saying?


     All properties that are rented are cash flow positive. They just dont have the yield you are looking for. In markets where there are single family homes at these prices, DC, Boston, NYC, LA, typical cap rates are 3-5%. 8% cap rates or yields are high risk, and thus will be found higher risk markets and properties, at cheap price points. 

    [email protected]301-893-4635Podcast Guest on Show #192
    District Invest Group546 Reviews
    WebsiteView Page
    5Reply
  • Account Closed
    OP
    Investor · Miami, FL · Member since 2023 · 120 posts · 46 votes
    2y
    Quote from @Russell Brazil:
    Quote from @Account Closed:
    Quote from @Russell Brazil:

    Sorry youll need to maybe look to a different country to find what you are looking for. Cities with single family homes in these proce ranges will have substantially lower yields than what you're looking for.


     So there is no way to be cash flow positive in the US on 1M+ homes today? Is that what you're saying?


     All properties that are rented are cash flow positive. They just dont have the yield you are looking for. In markets where there are single family homes at these prices, DC, Boston, NYC, LA, typical cap rates are 3-5%. 8% cap rates or yields are high risk, and thus will be found higher risk markets and properties, at cheap price points. 


     Cash flow positive with 30-35% down payment in today's market. Not cash flow on cash. 

    0Reply
  • Chris SeveneyBusiness Member
    Moderator
    Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
    2y

    @Daniel Rabinov

    You are better off putting money in a bank cd at 5.5% than buying real estate in todays market

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    3Reply
  • Carlos Ptriawan
    Member since 2019 · 7k+ posts · 4k+ votes
    2y
    Quote from @Account Closed:

    Hey everyone,

    Looking to buy LTR in the US. Cash in hand and also pre-approved if I go financing route. 

    Please keep in mind, anything that is sent to me will go through extensive checks via different resources I have, so please let's be practical and realistic about everything. 

    Try to understand cap rate.
    Your understanding of market is deeply flawed (or skewed).

    There's distribution of rent that at certain rent price (les say 5K rent) it is making more sense for the renter to buy their own house. The rent distribution are not linear progressive. 

    Once the rent is above 4k, this is the situation where renter is very qualified to get mortgage and quite well versed in their financial situation that they may just choose to rent for a house of 4k or less rather than spending 7k a month for rental; or get mortgage and paying only 4-5K per month for one mil house.

    7Reply
  • Tim JacobPro Member
    Real Estate Agent · Baltimore, MD · Member since 2016 · 520 posts · 379 votes
    2y

    Maybe instead of getting 10 you get 4 or 5 homes  in a cash flow market.  In that range you should be able to get high quality assets that are easy to manage.  They might be close to a 1% rule property and be relatively turnkey in that range.   Risk should be relatively mitigated.  You could amp your yield by managing remotely which could be done in that asset class.  I'd get a realtor who knows the area and has rental and pm or landlord  experience that could also lease it for you.  Think that's about what you can  get cash flow wise these days being remote.  You can try to get a full team of people working for you remotely but that is far more prone to failure.

    1Reply
  • Caroline Gerardo
    Lender · Washington DC · Member since 2015 · 2k+ posts · 2k+ votes
    2y

    A $10000 monthly tenant wants a seven million dollar house. To reach rents above $7000 a month you have to be near tech hubs or pray that your remote tenant isn't forced back to office soon.

    In California, Arizona, Washington, Oregon a one million dollar house with a view and amenities can rent for $6000. 

    HOA fees will crash your model, so you are right in excluding them BUT MOST luxury single family real estate is in a HOA, so there's that.

    To cash flow you need to put 30 -40% down payment with today's interest rates.

    A $1200000 house in Laguna Niguel the PITI with 20% down is $8840 plus HOA of $200- $500 Rents for this house, as has ocean view is $7200.

    I know a house that is not on the market and owner could rent back BUT you will not make the return on investment you plan with 8% 30 year rates. 

    A preapproval letter that assumes the rents you state will not close when the appraiser does a rental survey and it results much lower. Then lender is going to say- put more down payment.

    6Reply
  • James Hamling
    Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes
    2y
    Quote from @Account Closed:
    Quote from @Russell Brazil:
    Quote from @Account Closed:
    Quote from @Russell Brazil:

    Sorry youll need to maybe look to a different country to find what you are looking for. Cities with single family homes in these proce ranges will have substantially lower yields than what you're looking for.


     So there is no way to be cash flow positive in the US on 1M+ homes today? Is that what you're saying?


     All properties that are rented are cash flow positive. They just dont have the yield you are looking for. In markets where there are single family homes at these prices, DC, Boston, NYC, LA, typical cap rates are 3-5%. 8% cap rates or yields are high risk, and thus will be found higher risk markets and properties, at cheap price points. 


     Cash flow positive with 30-35% down payment in today's market. Not cash flow on cash. 

    I don't get what your trying to say in this reply here Daniel. 

    Look, short-short version is your expectations are COMPLETELY unrealistic, out of touch with market realities. The yields your expecting have never been a realistic thing in Luxury Rentals. Yes, certain times there has been certain windows of opportunities yes, limited opportunities in both time and volume. Those are the exceptional exceptions.

    If one has in there control a property meeting your listed criteria, they-don't-need-you. They can pick and choose any 10, 20, 50+ interested buyers. And of course they'd list it in some form or fashion, driving up price and with it yield down. 

    If I have a class-A off-market property reliably driving $9kmnth in revenues, there is not a snowballs chance in he-double-hockey-sticks that I'd let you have it for $1.2m. More like $1.7m.

    1Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    2y
    Quote from @James Hamling:
    Quote from @Account Closed:
    Quote from @Russell Brazil:
    Quote from @Account Closed:
    Quote from @Russell Brazil:

    Sorry youll need to maybe look to a different country to find what you are looking for. Cities with single family homes in these proce ranges will have substantially lower yields than what you're looking for.


     So there is no way to be cash flow positive in the US on 1M+ homes today? Is that what you're saying?


     All properties that are rented are cash flow positive. They just dont have the yield you are looking for. In markets where there are single family homes at these prices, DC, Boston, NYC, LA, typical cap rates are 3-5%. 8% cap rates or yields are high risk, and thus will be found higher risk markets and properties, at cheap price points. 


     Cash flow positive with 30-35% down payment in today's market. Not cash flow on cash. 

    I don't get what your trying to say in this reply here Daniel. 

    Look, short-short version is your expectations are COMPLETELY unrealistic, out of touch with market realities. The yields your expecting have never been a realistic thing in Luxury Rentals. Yes, certain times there has been certain windows of opportunities yes, limited opportunities in both time and volume. Those are the exceptional exceptions.

    If one has in there control a property meeting your listed criteria, they-don't-need-you. They can pick and choose any 10, 20, 50+ interested buyers. And of course they'd list it in some form or fashion, driving up price and with it yield down. 

    If I have a class-A off-market property reliably driving $9kmnth in revenues, there is not a snowballs chance in he-double-hockey-sticks that I'd let you have it for $1.2m. More like $1.7m.


     closest i have seen is in Vegas  my kids neighbor's house is 3 to 3.5 mil and they rented it for 20k a month..  vegas can bring in the highroller monthly rents.   other wise most of the time your looking at rent being Half of the sale price so 1 mil home 5k in rent..  in some markets in the mid west were a 1 mil home is a mansion might get 7k.. but its a white elephant property. 

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  • James Hamling
    Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes
    2y
    Quote from @Jay Hinrichs:
    Quote from @James Hamling:
    Quote from @Account Closed:
    Quote from @Russell Brazil:
    Quote from @Account Closed:
    Quote from @Russell Brazil:

    Sorry youll need to maybe look to a different country to find what you are looking for. Cities with single family homes in these proce ranges will have substantially lower yields than what you're looking for.


     So there is no way to be cash flow positive in the US on 1M+ homes today? Is that what you're saying?


     All properties that are rented are cash flow positive. They just dont have the yield you are looking for. In markets where there are single family homes at these prices, DC, Boston, NYC, LA, typical cap rates are 3-5%. 8% cap rates or yields are high risk, and thus will be found higher risk markets and properties, at cheap price points. 


     Cash flow positive with 30-35% down payment in today's market. Not cash flow on cash. 

    I don't get what your trying to say in this reply here Daniel. 

    Look, short-short version is your expectations are COMPLETELY unrealistic, out of touch with market realities. The yields your expecting have never been a realistic thing in Luxury Rentals. Yes, certain times there has been certain windows of opportunities yes, limited opportunities in both time and volume. Those are the exceptional exceptions.

    If one has in there control a property meeting your listed criteria, they-don't-need-you. They can pick and choose any 10, 20, 50+ interested buyers. And of course they'd list it in some form or fashion, driving up price and with it yield down. 

    If I have a class-A off-market property reliably driving $9kmnth in revenues, there is not a snowballs chance in he-double-hockey-sticks that I'd let you have it for $1.2m. More like $1.7m.


     closest i have seen is in Vegas  my kids neighbor's house is 3 to 3.5 mil and they rented it for 20k a month..  vegas can bring in the highroller monthly rents.   other wise most of the time your looking at rent being Half of the sale price so 1 mil home 5k in rent..  in some markets in the mid west were a 1 mil home is a mansion might get 7k.. but its a white elephant property. 


    What happens in Vegas stays in Vegas, right. 

    This seems a really good "rule of thumb" basis for luxury rentals. All mine follow this, with a modifier value for unique special features like certain lake front etc.. 

    0Reply
  • Carlos Ptriawan
    Member since 2019 · 7k+ posts · 4k+ votes
    2y
    Quote from @Caroline Gerardo:

    A $10000 monthly tenant wants a seven million dollar house. To reach rents above $7000 a month you have to be near tech hubs or pray that your remote tenant isn't forced back to office soon.

    In California, Arizona, Washington, Oregon a one million dollar house with a view and amenities can rent for $6000. 

    LOL, thing is one million dollar house with view is the same as one million dollar without view.
    I immediately checked my previous one million dollar house (this is below avg market btw), it can only be rented for $3400.
    my current one million dollar house can only be rented for $3800.

    One million dollar house was big thing back in the 1999, but even poor man's condo in CA is more than one million dollar lol, I guess once it's beyond 1.5 milion the ratio between rent to price is no longer showing any significant relationship. I honestly doesn't believe any rent number outthere after certain price, they are just making it up or plain lucky sometimes.

    There's trick, however how to make 1 mil dollar house without view can make significant $6K-$7k rent. Is by having different building structure, well it becomes MF in SF zone.

    0Reply
  • Carlos Ptriawan
    Member since 2019 · 7k+ posts · 4k+ votes
    2y
    Quote from @James Hamling:
    Quote from @Jay Hinrichs:
    Quote from @James Hamling:
    Quote from @Account Closed:
    Quote from @Russell Brazil:
    Quote from @Account Closed:
    Quote from @Russell Brazil:

    Sorry youll need to maybe look to a different country to find what you are looking for. Cities with single family homes in these proce ranges will have substantially lower yields than what you're looking for.


     So there is no way to be cash flow positive in the US on 1M+ homes today? Is that what you're saying?


     All properties that are rented are cash flow positive. They just dont have the yield you are looking for. In markets where there are single family homes at these prices, DC, Boston, NYC, LA, typical cap rates are 3-5%. 8% cap rates or yields are high risk, and thus will be found higher risk markets and properties, at cheap price points. 


     Cash flow positive with 30-35% down payment in today's market. Not cash flow on cash. 

    I don't get what your trying to say in this reply here Daniel. 

    Look, short-short version is your expectations are COMPLETELY unrealistic, out of touch with market realities. The yields your expecting have never been a realistic thing in Luxury Rentals. Yes, certain times there has been certain windows of opportunities yes, limited opportunities in both time and volume. Those are the exceptional exceptions.

    If one has in there control a property meeting your listed criteria, they-don't-need-you. They can pick and choose any 10, 20, 50+ interested buyers. And of course they'd list it in some form or fashion, driving up price and with it yield down. 

    If I have a class-A off-market property reliably driving $9kmnth in revenues, there is not a snowballs chance in he-double-hockey-sticks that I'd let you have it for $1.2m. More like $1.7m.


     closest i have seen is in Vegas  my kids neighbor's house is 3 to 3.5 mil and they rented it for 20k a month..  vegas can bring in the highroller monthly rents.   other wise most of the time your looking at rent being Half of the sale price so 1 mil home 5k in rent..  in some markets in the mid west were a 1 mil home is a mansion might get 7k.. but its a white elephant property. 


    What happens in Vegas stays in Vegas, right. 

    This seems a really good "rule of thumb" basis for luxury rentals. All mine follow this, with a modifier value for unique special features like certain lake front etc.. 


    A 3.5 mil house with 3mil 7.5% DSCR rate is paying about ~20k monthly mortgage.
    The dude (unless they're Russian billionaire that can't buy US asset) is better buying the house rather than renting for 20k. Math-speaking it just doesn't make sense because they have strong buying power to buy, not to rent.

    At certain price point, there's no more attractiveness to rent.
    This is why it's important to understand market cap rate and its relationship with residential price and rent model.

    One can't just beat market cap rate into two standard deviation, it's just illogical.

    0Reply
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