Where are the best markets to invest in SFR in the US using the buy, fix, refinance and rent strategy for 2015?

[Arthur Zaragoza]

Hello BP nation. First I would like to thank everyone here for being so awesome! : )

I am new to this site and a new dad of a beautiful baby girl living in Toronto, Canada. I am a musician at heart and a real estate investor/realtor looking for a way to provide for my family, loved ones and to save for retirement.

I current hold and self-manage a small portfolio here in Toronto. My mortgages are both up for April and I am looking to do an equity take out to reinvest in the US.

My 2015 goal is to improve my cash flow by doing the buy, fix, refinance and rent strategy and keep repeating the process until I have 10-15 rented properties in my portfolio.

I am looking for SFR from $50-100k (fixer uppers, REO, Tax liens etc) that I can ad value trough renovation that could also be converted into duplexes that rent for around $1,000/month or more. It must be situated on C+ and B areas near public transit with easy access to downtown, universities, hospitals etc. I desire cities that are starting to boom with jobs and population growths that are also landlord friendly.

Any recommendations would be much appreciated. I am open to JV with other inventors, network with property managers, mortgage brokers, realtors, house inspectors, general contractors, lawyers etc.

Many thanks in advance for your time.

Arthur

[Angie B.]

Hi @Arthur Zaragoza - we live & invest in Kansas City using precisely the model you describe. 70 to 75% LTV is what you will see for investment properties, and we have found banks that will do loans for as little as 50k (would probably need to appraise for at least 72k). Good interest rates, for example we've recently done 30 year fixed at 4.25 or 4.375%. Have to wait 6 months to a year after purchase to cash out refi- depending on the lender. Timing it shortly after spring is best for comps. Keep in mind rehab to prove increase in value- we've bought some really great deals that didn't need too much major work, but then when we hit appraisal time it was hard to prove a huge increase in value in 6 months time, because we hadn't put on a new roof or remodeled the kitchen. But one we bought recently, was a 3/2 in the northland for 55k (probably put 6k into it) and we should be pulling out 52K to reinvest somewhere else. So not too shabby (even though we thought it should have appraised for more)! We are cash flowing $350 after financing, but we manage ourselves, would look more like $250 if you paid property management I imagine. Also we did the rehab ourselves since we live in town, so that cost would be higher too. However I believe Kansas City is a great market, even for out of state investors. I think you would be hard pressed to find a SFR that cash-flowed $500 or more if you had a mortgage, especially as a long distance investor.