Cash flow (w/debt) questions for midwest market

Cash flow (w/debt) questions for midwest market

Rental Property Investor · Canton, OH · Member since 2017 · 1k+ posts · 1k+ votes

Hello friends,

As we approach the end of the year, I'd like to evaluate my portfolio. I could really use some assistance as I'd like to compare my performance with what others are seeing in the midwest market to determine if any adjustments need made on my end.

My questions re: cash flow (w/leverage) are:

1.) Based off your experience, what calculation are you typically using for CF when making a final decision on a SFR? Be specific if you assume specific %'s of rent for expenses (e.g. 5% vacancy, 10% repairs, etc.).

2.) What's the average cash flow you see in the midwest (again, w/leverage)? What's the minimum you would accept?

3.) What % of your rent typically goes to your PITI?

Thank you in advance for any help! Super appreciated!

Disclaimer: I fully realize there's more to a deal than just a static calculation (CoC %, how much money you put down, time invested, condition of property, appreciation and value-add potential, etc., etc.). I am just trying to get a "general ball park"

0Reply
14 views

Most Popular Reply

Rental Property Investor · Salem, OR · Member since 2016 · 202 posts · 305 votes
6y

I’m disqualified to respond

I’ve invested in B- to C+ Properties in the Memphis market for years now and one of the first things learned years ago was just don’t have any debt on them. When there’s enough change in the jar it’s time to buy another 🤪

See this reply in the discussion

9 Replies

Jump to latestLatest
  • Rental Property Investor · Salem, OR · Member since 2016 · 202 posts · 305 votes
    6y

    I’m disqualified to respond

    I’ve invested in B- to C+ Properties in the Memphis market for years now and one of the first things learned years ago was just don’t have any debt on them. When there’s enough change in the jar it’s time to buy another 🤪

  • Rental Property Investor · Canton, OH · Member since 2017 · 1k+ posts · 1k+ votes
    6y

    @Dean H.

    Haha. I don't mind the debt for now...so longs as the numbers work.

  • Investor/Accountant/Builder · Meno, OK · Member since 2014 · 1k+ posts · 918 votes
    6y
    @CJ M I have debt. and have learned that you babysit the properties until they are paid off. I am selling properties to clear debts.
  • Rental Property Investor · Canton, OH · Member since 2017 · 1k+ posts · 1k+ votes
    6y

    @Arlan Potter

    Absolutely...that said, if you have any numbers/averages (while using leverage) that you could share from your experience, it would be appreciated.

  • Rental Property Investor · Canton, OH · Member since 2017 · 1k+ posts · 1k+ votes
    6y

    Not many midwest investors out there? 🤣

  • Developer · Atlanta and Detroit · Member since 2018 · 601 posts · 821 votes
    6y
    Originally posted by @Account Closed:

    Not many midwest investors out there? 🤣

    I have been investing in Detroit market

    I would not finance any of my deals, only cash at the moment. 


    It takes time to bed them and have a performing asset. Only when this happens and asset appreciating would I consider financing

  • Rental Property Investor · Canton, OH · Member since 2017 · 1k+ posts · 1k+ votes
    6y

    @Marisa R.

    Thank you for the post Marisa (as you could tell I was getting a lot of feedback 🤣). So taking debt out of the equation, what type of cash flow do you generaly shoot for (a low/high range is fine if you prefer). Also, out of your gross rents, what % do you allocate to repairs, capex, vacancies?

  • Rental Property Investor · Columbus, OH · Member since 2017 · 3k+ posts · 3k+ votes
    6y

    Hi @Account ClosedI invest in Columbus OH. All of my properties Cash Flow 30-40% of the total rent. This is investing in B & C areas. PITI is around 40-50%. Anything less and I think id camp around for a bit waiting for a better deal.

  • Rental Property Investor · Canton, OH · Member since 2017 · 1k+ posts · 1k+ votes
    6y

    @Steven Wilson

    Thank you Steven, this is the type of information I'm looking for. If you don't mind me asking, how do you allocate for repairs, vacancy, capex? 

Join the conversationCreate a free account to reply, vote on answers and follow this thread.