How to attract investors into a thriving rental market?

[Jeffrey R.]

It's a pleasure to meet everyone here. I am truly impressed with this forum and the amount of valuable information that so many great minds are sharing. It's a wonderful thing to be a part of, and I feel honored.

I live in a city that is in a bit of a "renters crisis". The vacancy rate right now and for some time already has sat at about 2%. With knowing this, I recently purchased a SFR with the intent to convert to multi-family. I brought a contractor in, who was a friend of the family, and we did what was necessary to legally split the two suites. Once the conversion was near completion, I put the upstairs suite on a local renting site. As anticipated, there was a large amount of people that showed interest and put in their applications to rent the suite.

So two months after getting possession of this house, I have tenants living upstairs, and we are nearing completion of the downstairs suite. As I look back on the past two months, I can't help but think that aside from the sacrifice of time that I had to put in to get this project to where it is today, this was a pretty fun and easy task. I'll admit that I did get caught with costs that I didn't factor in to the initial budget, but for a novice, I think I gained a lot of knowledge that I plan to put into play for the next house. These are the numbers that I'm working with:

Purchased the house for $260,000

Duplex conversion and renovation cost $20,000

Monthly rent collected for both suites $2500

Mortgage payment $1200

Yearly NOI $6000

So this is where my question starts to arise. I'd like to get foreign investors involved in this market and I'm wondering if anyone has any tips or ideas on how I can go about in creating a formal deal package or presentation for investors. I've spent 10 years in Taipei, where there is absolutely no room for profit with renting in the housing market. Housing prices are astronomically high and rents are dirt cheap. In fact, in some areas, you'd have to rent out a place for 80 years before the tenant had helped pay off your mortgage. It's just the most ridiculous bubble you've ever seen.

My next question to everyone is: what's a fair percentage for a profit return? Obviously every revenue property investor has different expectations, but if there was a neutral number out there that most investors could be content with, what would it be? 7%? 9%? 11%? At what percentage do things start to get enticing for the majority of people?