Analysis Paralysis in Houston metro

[Denise Mayo-Walley]

Hello BP community!

I've spent lots of time in the last couple of months learning as much as possible from various sources and now I am getting ready to take action! I have started assembling my team and will be working with a Realtor that has experience working with investors and has actually found properties for a co-worker of mine. I've clearly defined my target areas, price range, square footage, bedrooms and baths, age of the home, etc and now I am trying to become more comfortable with analyzing homes I am interested in.

Since I have plans to buy & hold I have become very familiar with the 1%, 2% and 50% rules and for life of me I cannot make the 50% rule work for the market here in my Houston suburb of Sugar Land/Missouri City TX!!!

I am looking at properties in the $80-110k range which are renting for $1,200/month on average. While the 1% rule is satisfied at this amount for rent, every property I look at pretty much fails the 50% rule with cash flow amounts less than $100.

My questions are these:

- Does anyone have any experience in the Houston suburbs with properties in a similar price range and able to have good cash flowing properties? If so, what was your strategy?

- How true have you found the 50% rule to be? (I know this will vary based on the age of the home due to expecting to make more repairs when compared to a newer home)

- Any tips on whether it financially makes more sense to purchase cheaper properties ($60k) requiring more work than I originally intended to do to increase the monthly cash-flow though investing more up front?

Thank you all for your help -- I'm driving myself crazy!