Hawaii Rookie - out of state markets for cash flow

[Kaiwi Attwood]

Shakas from Hawaii!

I’m just starting out with investing, but the more I read and run numbers, the more I realize how difficult it is to positively cash flow properties in Hawaii.

Looking for tips on other markets that you recommend for investors to find positive cash flow properties and how you found each of these locations if they were outside of your local areas.

Mahalo!

Kaiwi

[Lane Kawaoka]

Hawaii is a primary market which are NOT ideal for cashflow investing.

It could appreciate but I consider that gambling. Sophisticated investors invest on cashflow where the rents exceed the mortgage plus expenses (and enough money to pay for professional property manage to do our dirty work).

Sophisticated investors look at the Rent-to-Value Ratio and look for at least 1% or more to be able to cashflow after expenses. You find the Rent-to-Value Ratio by taking the monthly rent dividing by the purchase price. For example a $100,000 home that rents for 1,000 a month would have a Rent-to-Value Ratio of 1%. Most people I work with live in primary markets (as opposed to Birmingham, Atlanta, Indianapolis, Kansas City, Memphis, Little Rock, Jacksonville, Ohio, or other secondary or tertiary markets) where the Rent-to-Value Ratios are under 1%. Plus we invest in red states so we have good landlord laws on our side too.

Let me know if you have any specific questions I can help out with.

Invest where the numbers make sense... live where you want 🤙