Richmond VA 1% Rule?

Question

Hi everyone, I was wondering if any investors in the Richmond VA area had success finding the properties that fit the 1% rule? Are there specific neighborhoods that you have found that fit the criteria with a decent tenant pool? I'm an investor from Northern VA looking at 200k and below properties in Richmond since I am priced out of my area.

Looking forward to hearing from everyone!

Taylor L. · Answer

Unlikely. Richmond's residential market has only gotten much, much hotter than it was through the pandemic. The only way you'll find this type of deal is off market and it's going to be competitive.

Aaron W. · Answer

@Andris Linauts

Is there a reason why you are only looking in Richmond?  I am also in Northern Virginia but do not invest in Virginia. I can understand if you are looking for a good investment market that is close enough to drive to. There are plenty of markets outside of Virginia that have properties meeting the 1% rule. In fact, you can probably go further south into North Carolina or west into West Virginia to stay close.

Wale Lawal · Answer

@Andris Linauts

It's great that you're exploring opportunities in the Richmond, VA area for real estate investing. Finding properties that fit the 1% rule in specific neighborhoods often requires a combination of market research, networking, and a deep understanding of local dynamics. Here are some tips to help you in your search:Perform in-depth market research in Richmond. Recognize the general trends in the real estate market, the valuations of properties, and the possibilities for stability or growth. Seek out areas where rental demand has historically been steady.Attend meetups and networking events in the Richmond region to make connections with nearby real estate investors. Skilled investors frequently possess knowledge about particular communities that comply with the 1% criterion.Deal with a local real estate broker that focuses in buying investment homes. Insights on communities, property prices, and prospective rental revenue might be obtained from them.Keep an eye out for areas that are experiencing gentrification or revival. These regions could present chances for investments with potential for growth in the future.Think about the characteristics of prospective renters in various communities. A varied and reliable renter pool may be drawn to areas that are close to amenities, job hubs, and educational institutions.Keep in mind that the 1% rule is only a recommendation, and it's crucial to take the whole investment picture into account, taking into account factors like property quality, location, and growth potential. Success in real estate frequently results from adjusting to changing market conditions and making well-informed judgments based on in-depth study. I hope your investing experience in Richmond goes well!

Asif Kabani · Answer

Hi there! It's great to hear about your interest in investing in the Richmond, VA, area. While the 1% rule can be a helpful guideline for some investors, it's essential to note that market conditions vary greatly by location, and finding properties that strictly adhere to this rule might be challenging, also in Richmond. However, that doesn't mean there aren't good investment opportunities available.

Richmond has a diverse real estate market with several neighborhoods offering potential, though it might require looking into properties with different strategies in mind. For example, exploring options like PadSplit for shared housing or MTR strategies could provide avenues to achieve the 1% rule or better. These strategies can sometimes offer better cash flow compared to traditional LTR, especially in markets where property prices and rents do not align with the 1% rule.

I encourage you to expand your criteria and consider these alternative strategies. Each has its own set of considerations and potential benefits, so it's crucial to understand them thoroughly before diving in.

If you're interested in exploring these options further or discussing other investment strategies that could work for your situation, I'd be more than happy to have a conversation with you. Learning from each other's experiences is what makes this community so valuable. Looking forward to hearing from you and best of luck with your investment journey in Richmond!

Stephen Glover · Answer

@Andris Linauts I'm finding 1% or better, off-market BRRRR deals (I don't bother with MLS- if it's public info I'm generally not interested).  My latest BRRRR was $130K invested, renting for $1585/month, ARV $195K.  Hard to find, but it's possible.

Austin Jones · Answer

The Tri-Cities area just south of Richmond which includes Colonial Heights, Hopewell, and Petersburg would be the best area to find properties under 200k that might fit the 1% rule if they need a rehab. Please let me know if I can help you in any way!

Dawn Roy · Answer

@Andris Linauts congratulations on identifying a wonderful place like RVA.  We are rocking here and have a very strong real estate market.  I also commend you on having a baseline for your investing strategy.

Homes at 200K and below are very hard to come by here.  Even the multi-family units are selling quickly, regardless of condition.  I was in a duplex this week with a starting price tag of 175K that would need at least 125K in renovations.  Sold in one day with multiple offers.

Finding off market opportunities is a must.  There are meetups here that allow for networking with wholesalers and others in the investor space here.  Networking is key.

Like another post suggested, you should also consider all options.  Not only LTR but MTR and house sharing.  There is a huge need for good rentals and so many ways to provide that service.  FYI, the City of Richmond has become unfriendly to non owner-occupant STR's.

All the best to you in your investment goals.

Cheers!

Glen Wiley · Answer

All of our long term rentals are in the counties around Richmond: Henrico, Powhatan and Goochland.

Look at Chesterfield, Powhatan and Goochland - those are suburbs/exurbs of Richmond and the deals are out there. Be careful about the neighborhoods, there are some neighborhoods in the counties that I won't put money into based on downward trends of maintenance and appearance.

John Olsen · Answer

@Stephen Glover

Where do you start to find these types of deals?

Andris Linauts · Answer

@AJ H. There’s not too much of a reason for VA other than the driving distance like you said - being able to see the property / more control over rehab.

I’d be interested to discuss how you’re investing out of state, as you know getting away from the DC metro is really the only way to stay price friendly. It’d be helpful to hear from someone who’s in the same boat, but a little further along in the process!

Richmond VA 1% Rule?

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