Cash Flowing in Oklahoma City

[David Groemping]

Hi everyone,

I was hoping to get some feedback on the numbers I have been running on long term buy-and-hold SFHs around Oklahoma City. The example I am including here is in Moore, OK.

As a little background, My intended investing strategy is to buy properties in great school districts and rent them out to nice families who will hopefully take good care of the property and stay for a while. 

The strategy behind these numbers is to buy in cash and then perform a cash out refinance a little down the line. Executing the BRRRR strategy I believe. Anyhow, I cannot seem to get the numbers to work (even with a very low purchase price) in terms of getting a decent cashflow while not leaving any/much cash in the property.

Here is a link to my spreadsheet:

https://drive.google.com/file/d/11Kqncpzvf186H3ZT79k-YQLwUrb7Zrkx/view?usp=sharing

I have gone through to run the numbers on a number of SFHs in the area and come across the same issue. The example property that I choose for this exercise is linked in the spreadsheet, and also here:

https://www.zillow.com/homedetails/301-Christopher-Todd-Dr-Moore-OK-73160/21724583_zpid/?utm_source=email&utm_medium=email&utm_campaign=emo-sendtofriend-hdp&rtoken=f8e8cae0-6504-4b77-955d-a4d46f9ef4cd~X1-ZUwc7v4kuhxiix_82rpg

My first assumption is that the holding expenses I have collected are off, but I am sure there could be a myriad of things that I am missing.

I know there are a lot of you out there who ARE making the numbers work, so I would very much appreciate any/all advice!

Many thanks,

David

[Scott England]

@David Groemping I’d suggest being a little more open to other areas. In Moore you will be competing primarily with owner occupants, which isn’t going to bode well for forcing the return numbers you are looking for. If you are looking for tenants that will stay a while and take (relatively) good care of the place, you don’t need to stick to the best schools districts. My longest tenancies are both section 8 houses with converted garages that brIng in 1.7 and 1.9% rent to cost (after a full reno). They are also 2 of the quietest and take good enough care of the homes. I think you are on the right track looking in Oklahoma, but there’s plenty of working class neighborhoods to invest in that will get you what you are looking for.