Am I the only person buying rental property? Seems like that...

[Tyron McDaniel]

We like many investors LOVE flipping deals for the BIG checks or wholesaling deals for the FAST checks but I can honestly tell you the deals that I most get PUMPED about right now are Buy & Hold deals! Most gurus don't talk about them much and most investors look to it as the last thing to do with their money but I can honestly tell you that if you plan on being around real estate beyond this current BOOM cycle, you should consider the merits of having more rental units. The good ole days of tenants, toilets and taxes have become obsolete for savvy investors who now leverage systems, property managers and good home warranty's with deductibles to be paid by the renter for most repairs to minimize the management headaches! 

Ideally you want what we call a Bread & Butter property located in a solid community where rents (For Houston) range from $1000 to $1300 a month with pretty good schools and close proximity to the freeways, downtown and the working epicenters around the city. Sometimes you come across deals that are in great condition, require only lipstick and a little foundation work (all houses in Houston at some point need it) and are ready to go like this one. We paid more than what we would normally pay but the house is nicer than most we buy... 

ALL IN on this deal will be about $88k or so and we expect rent to be $1275 per month with about $45k in equity... a nice base hit that deal that will appreciate handsomely over the next 7-10 years (our projected hold period) and will provide a stable cash flow over that time frame! The average person could easily buy 6-10 properties similar to this in most markets in the US and build a substantial wealth generator for themselves without being a guru, quitting your job or having to figure out some complex strategy for doing real estate! 

Have a great day closing profitable deals guys & gals...

Tyron in Houston! 

[Mike H.]

You're speaking to the choir @Tyron McDaniel :-)

I have been doing this for about 9 years or so now and have done nothing but buy and hold. Before I started, I used to listen to a ton of podcasts out there. And one of the things that always came up on one of the shows was what their biggest regret was. Common theme of that answer tended to be "My biggest regret was ever selling anything". 

So I've taken that to heart and now have 64 rentals. Most of which are right in that sweet spot of that deal you took down in your post above. I'm in that 140k to 160k ARV that I was getting at about 70% ALL IN.

That being said, the one thing I think you may be a bit off on is how easy you make it sound to pick up deals like that. It is extremely location dependent. From Jan 2015 thru the end of 2016 I was able to pick up 31 of my 64 houses. I was buying 1 house a month or more. Then, starting in January of this year, everything just dried up. The sub 100k listings completely disappeared. You were basically seeing listings for 100k to 120k or more that needed 20k to 30k in rehab and were only worth 150k to 160k. 85% LTV was about the best I was seeing.

I got lucky with one just last month and got it for about 75% LTV all in so had to come out of pocket a bit just to get that one. And I was thankful I got it.

But the people in my areas and the ones I know that are a few counties further out are all feeling the same pinch. Just nothing out there.  Could you pull off one deal a year right now? Probably so. But even that is pushing it right now. 

It'll be interesting to see what this winter brings.  Before this year, Nov thru Feb were always great months. Now I don't know if that will be true anymore. 

So while I wholeheartedly agree with your post on buy and hold, I have to say that I think the ease at which most people will be able to find deals like that is far more overstated in your post than maybe you realize - at least in terms of people in other locations.