I dont understand how you make the numbers work on Class A RE?

[Douglas Gratz]

I currently have 12 units all of which are Class C. My ROI for most is around 12-14% and CoC way higher but how do I make my strategy work for Class A Properties? When I buy a property the following has been my strategy

1. Buy only duplex's and above

2. For duplex's make sure be all in for a max of 122K prefably 100k

3. After buying, rehabbing, and renting, REFINANCE

4. Duplex's appraise for 175k so I break even or profit on the deal while still owning

So with the above strategy, I am able to refi and still cashflow 600-800 per house (because the mortgage on 122k is $600.00) This strategy allows me to leverage so I can buy another and another and so on...However, my question is...

I want to diversify, and not just have Class C properties, but the more expensive the property, the higher the refi, and thus a higher payment.  Let say I buy a property and am all in for 300k its a duplex. (2) 2 bed units at 1300 each. So I gross $2600.00 with a $2200 mortgage payment (including insurance and taxes) In Class A neighborhoods the taxes may be higher then my estimate.  With putting repair 5% away and vacancy 5%, I end up in the red....

How do you make this work?? I would really like to diversify (Aside from getting it cheap enough to where I do not have to refi for 300k, and aside from choosing not to refi as that does not fit my strategy)e

Thanks friends, cant wait to hear what everyone has to say!

[Jay Hinrichs]

class A is usually not a day one investment many times its neutral to negative.. were properly located class A makes folks money is with real and consistent rent increases over time.. and ease of ( theoretically ) managing them.. better tenants less abuse less for maintenance etc.. 

And since this is a long game class A should have a real good shot at appreciation and that is where the big bucks are made..